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PP to sell stakes in port, toll roads to finance new infrastructure projects
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Construction work is carried out on the Pandaan-Malang toll road in December 2018. State-owned construction company PT PP plans to sell stakes in four infrastructure projects, including the Pandaan-Malang toll road. (The Jakarta Post/Nedi Putra AW)
S
tate-owned construction company PT PP is planning to divest itself of several infrastructure projects next year to fund new infrastructure projects that can boost its recurring income.
Finance director Agus Purbianto said on Tuesday that the company was looking to divest stakes in four of its infrastructure projects to help finance its capital expenditure in 2020.
“We’re planning to divest our stakes in Kuala Tanjung Port and the Medan-Kualanamu-Tebing Tinggi toll road [in North Sumatra], the Pandaan-Malang toll road [in East Java], the Manado-Bitung toll road [in North Sulawesi] and the Balikpapan-Samarina toll road [in East Kalimantan],” he told the press in Jakarta.
Although he did not mention the amount of money the company plans to raise from the divestment, Agus said the company should receive at least 1.3 times the book value of the projects.
PT PP president director Lukman Hidayat said the proceeds from the divestment would be used to finance the company’s capital expenditure, which would be increased to at least Rp 7.5 trillion next year.
“The rest of the funding will come from our subsidiary’s dividends and debts,” he said.
Agus further explained that the publicly listed firm would spend the funds on projects that would generate recurring income, such as drinking water supply, renewable energy projects and toll roads.
