Toll Road Program Indonesia: Syndicated Loan For Waskita Karya
State-controlled construction company Waskita Karya obtained a syndicated loan of IDR 5 trillion (approx. USD $375 million) from a group of nine banks. Sumitomo Mitsui Banking Corporation (SMBC) acts as sole mandated lead arranger and book-runner for the five-year loan, while the Bank of China (Hong Kong) Limited Jakarta branch acts as mandated lead arranger.
Lead arrangers for the new Waskita Karya loan are Bank KEB Hana Indonesia, Bank Permata, Bank OCBC NISP, while Bank China Construction Bank Indonesia, Bank CTBC Indonesia, Bank Shinhan Indonesia, and Bank SBI Indonesia act as arrangers.
Sumitomo Mitsui Banking Corporation accounts for the biggest portion (IDR 1.2 trillion) of the syndicated loan. Kazuhisa Miyagawa, President Director at SMBC, said his bank's participation in the syndicate reflects SMBC's involvement in the development of infrastructure in Indonesia, specifically toll road construction as Waskita Karya requires funds to construct its part of the central government's toll road development program.
Deddy Surya Wibowo, Relationship Manager Global Business Division at Bank KEB Hana (that contributes IDR 500 billion in the syndicated loan), said he has great confidence in the performance of Waskita Karya and is therefore glad to be part of the syndicate.
Muhammad Choliq, President Director of Waskita Karya, said the IDR 5 trillion loan will be fully used for the operations of Waskita Karya. The construction company plans to invest up to IDR 120 trillion in construction projects up to 2019, hence it is in need of a large pool of funds. The company currently has total debt of IDR 31.5 trillion.
The value of new contracts obtained by Waskita Karya has reached IDR 43 trillion this year (up to the first week of September 2017), dominated by toll road projects. In 2018 Choliq expects to generate a fresh wave of revenue from several projects that are nearly completed (including electricity transmission, the Palembang light rail transit and several toll roads).
Last week, shares of Waskita Karya and its subsidiary Waskita Beton Precast plunged as Waskita Karya said it failed to find suitable buyers for a stake in its subsidiary Waskita Toll Road. Although there were various parties interested to purchase a stake, they could not meet the requirements of Waskita Karya. Divestment and a rights issue are part of the construction company's program to seek funds to construct its part of the central government's toll road development program as well as to fund the company's other projects.
Shares of both companies have slightly recovered. However, so far this year shares of Waskita Karya are still down 24.90 percent.
Stock Quote Waskita Karya - WSKT: