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S&P warns of risks in SOEs after Waskita’s deferred debt payment
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President Joko “Jokowi“ Widodo (left) briefs reporters after inaugurating three sections of the Balikpapan-Samarinda toll road in East Kalimantan on Dec. 17, 2019. (JP/Marchio Irfan Gorbiano)
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&P Global Ratings says last week’s deferred debt repayment by state-owned construction company PT. Waskita Karya “could test investor appetite for corporate bonds” from Indonesia.
"Default risk is not limited to Indonesia's privately owned or listed companies, in our view," said S&P Global Ratings credit analyst Pauline Tang.
"The country's state-owned enterprises [SOEs] are also at risk of repeated liquidity shortfalls arising from mounting debt loads," Tang is quoted as saying in a press release published by S&P on Tuesday.
Read also: Infra projects on the line as construction SOEs face funding woe
Indonesia’s largest construction firm decided last week to push back to June 16, 2023, the payment of interest and principal on Rp 2.28 trillion (US$150.4 million) in outstanding rupiah-denominated bonds issued in 2018 and due this month, according to a stock exchange filing.
The company also deferred coupon payments on other bonds, explaining that the measure aimed to “ensure sufficient cash or cash preservation [that] may be utilized for operational working capital [and] provide time for the [company to conduct a] comprehensive review of the Master Restructuring Agreement.”
The Indonesia Stock Exchange (IDX) has suspended trade in the shares of Waskita Karya, which have the ticker symbol WSKT.
