TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Wika subsidiaries team up, plan IPO
Property management firm Wijaya Karya Realty, a subsidiary of state-owned construction company Wijaya Karya (Wika), has transferred its contracts to its sister company, construction firm Wika Gedung, to speed up development of its infrastructure projects
Change Size
P
roperty management firm Wijaya Karya Realty, a subsidiary of state-owned construction company Wijaya Karya (Wika), has transferred its contracts to its sister company, construction firm Wika Gedung, to speed up development of its infrastructure projects.
Wijaya Karya Realty (Wika Realty) transferred eight projects worth Rp 17.3 trillion (US$1.28 billion) to Wika Gedung as the latter was deemed to be better equipped to manage and complete the projects, Wika finance director Steve Kosasih told reporters on Friday.
“We chose Wika Gedung because it has proven to be able to complete projects effectively and efficiently,” said Steve, who also serves as Wika Realty commissioner.
Among the projects are Tamansari Swara apartments and Tamansari Kencana apartments in East Jakarta and Bandung, West Java, respectively. The construction costs for the respective apartments will reach Rp 242 billion and Rp 659.6 billion.
The contracts also include apartment projects in Surabaya and Permata Hijau, Jakarta, namely Tamansari Emerald and Tamansari apartments, which require Rp 591 billion and Rp 192.7 billion, respectively, to be completed.
In the contracts, Wika Gedung is also entitled to build a mixed-used apartment project and superblock, each in Kelapa Gading, North Jakarta, and Bendungan Hilir, Central Jakarta, which will need Rp 838 billion and Rp 2.21 trillion, respectively.
The company will also build residential projects in Jl. MT Haryono, South Jakarta, and Cakung, East Jakarta, with planned investment of Rp 2.3 trillion and Rp 10.4 trillion, respectively.
Apart from the eight handed over projects, Wika Gedung will also sign an agreement worth around Rp 3 trillion with the Indonesia Tourism Development Corporation (ITDC), bringing the contract total under the company’s management to more than Rp 20 trillion.
On the same day, Wika Gedung and Wika Realty announced their plan to conduct an initial public offering (IPO), with the former scheduled to hold the corporate action in November, while the latter in the first quarter of 2018.
Wika Gedung would offer 20 to 30 percent of its shares to the public, with about 60 to 70 percent of the proceeds to be set aside to support its expansion, while the rest would go to working capital, said Nur Al Fatah, the company’s human capital and investment development director.
However, the company refused to reveal the amount of funds it hoped to raise from the IPO.
“A portion of the IPO funds will be used to acquire a mechanical-electrical-plumbing (MEP) company,” Nur told The Jakarta Post, referring to a contractor that provides supporting equipment for buildings, such as elevators, escalators, electrical and pipe installations.
Nur said the planned acquisition would help Wika Gedung cut costs as around 30 to 40 percent of construction costs would be borne by MEP companies through sub-contractor services.
Meanwhile, Wika Realty president director Agung Salladin said the company planned to use the funds it raised from the IPO to finance its projects, pay short-term loans and pay off land it had acquired.
Wika Realty plans to release between 30 percent and 40 percent of its shares to the public as it aimed to raise Rp 3.5 trillion and Rp 5 trillion during the IPO, Agung said.
In 2017, Wika Realty is targeting Rp 2.1 trillion in marketing sales. Until now, it has achieved marketing sales of Rp 700 billion.
