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ndonesia’s fourth-largest construction firm, PT Waskita Karya, aims to raise Rp 1 trillion (US$111 million) from an initial public offering scheduled for the first quarter of next year, which is expected to see between 30 to 35 percent of the company’s shares floating in the bourse.

The public offering is part of the company’s grand strategy to improve its finances and be independent from the care of state asset manager PT Perusahaan Pengelola Aset (PPA).

PPA injected Rp 475 billion to take over the government’s 99 percent stake in Waskita in 2010 to restructure the company’s finances and operational activities after it persevered while paying back high short-term debts from banks and suppliers.

Following restructuring, Waskita’s revenue almost quadrupled within four years to Rp 7 trillion in 2011, but its net profit was still in the hundreds billions at about Rp 170 billion as high interest costs degraded its income.

“The IPO is aimed at making us a pure state-owned firm and get out of PPA. Secondly, it is to strengthen our capital structure through equity. Our equity is only at Rp 600 billion,” president director M. Choliq told reporters Monday. “We aim to boost equity to above Rp 1 trillion post-IPO.”

Waskita secured Rp 4.4 trillion in bank loans from PT Bank Negara Indonesia Tbk (BBNI) on Monday and plans to raise Rp 750 billion from bond issuance later in the first half of this year to fund construction plans.

Choliq said Waskita would issue five-to-seven-year debt papers to restructure the company’s short-term debts, which carry higher risks. “So, we need long-term funding for long-term investment activities. One of the ways is by issuing bonds, other than an IPO.”

The rupiah-denominated bond issuance is still undergoing a ratings process by local agency PT Pemeringkat Efek Indonesia (Pefindo) until next month at the latest, but Choliq was upbeat to secure BBB+ or A- ratings.

Waskita is also short-listing underwriters for the bond issuance between state securities houses PT Mandiri Sekuritas, PT Bahana Securities and PT Danareksa Sekuritas, he added.

Many companies have been taking advantage of Indonesia’s new investment grade rating from Fitch Ratings and Moody’s Investors Service, which is expected to bring down borrowing costs across the board, especially for bonds.

Among others are coal miner PT Berau Coal Energy Tbk (BRAU) $500 million notes, while mid-sized lenders PT Bank Permata Tbk (BNLI) and PT Bank Bukopin Tbk (BBKP) are gearing up to issue Rp 1 to Rp 2 trillion subordinated debts (sub-debt). Financing firms such as PT Astra Sedaya Finance and PT Indomobil Finance Indonesia will also issue Rp 2 and Rp 3.5 trillion bonds this year.

“Waskita’s financial conditions will improve at the end of this year to be attractive enough for the IPO,” Choliq said.

Waskita is eyeing Rp 9 trillion revenue from Rp 17 trillion-worth construction projects like toll roads this year, up 28.6 percent from Rp 7 trillion revenue expected last year. The 2011 audited results will be reported later this month.

So far this year, Waskita has secured contacts worth Rp 2 trillion, including the Tanjung Benoa–Nusa Dua toll road worth Rp 800 billion, Rp 600 billion Semarang–Bawen toll road, as well as E2 and W2 Tanjung Priok toll road, respectively worth Rp 1.2 trillion and Rp 190 billion.

Analysts are bullish on infrastructure-related companies to outshine the others and secure more projects, especially after the much-awaited land acquisition law was passed late last year to ease land procurement for public purposes.

“We expect Waskita to be comparable with PT PP, Wijaya Karya and Adhi Karya. So once traded at the stock exchange, Waskita’s shares could be an alternative,” said Fadlul Imansyah, vice president for investment at PT CIMB Principal Asset Management.

Waskita’s assets were valued at Rp 5 trillion, as of year-end 2011 and it also planned to acquire the highly indebted state-run construction firm, PT Istana Karya (Istaka), to ease its construction projects’ acceleration.