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Cash-tight Waskita Karya construction firm set to divest two toll roads 

PT Waskita Toll Road (WTR) will divest 20 percent of Semarang–Batang toll road in Central Java and 35 percent of Cinere–Serpong toll road in Greater Jakarta to PT Sarana Multi Infrastruktur.

Dzulfiqar Fathur Rahman (The Jakarta Post)
Jakarta
Sat, April 17, 2021

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Cash-tight Waskita Karya construction firm set to divest two toll roads

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T Waskita Karya, Indonesia’s top state-owned construction firm, is set to sell its shares in two toll roads this year to state-owned infrastructure financier PT Sarana Multi Infrastruktur (SMI) to raise capital and pay off debt.

Waskita, through subsidiary PT Waskita Toll Road (WTR), will sell a 20 percent share in the Semarang–Batang toll road in Central Java and 35 percent share in the Cinere–Serpong toll road in Greater Jakarta. The shares are collectively worth Rp 2.02 trillion (US$138.1 million).

SMI will pay for the two toll roads by disbursing Rp 515 billion in cash and by share swapping its 6.12 percent ownership in WTR worth Rp 1.5 trillion. The transactions are inked under a conditional sale purchase agreement (CSPA) signed on Monday.

In other words, Waskita will gain a larger ownership of WTR and Rp 515 billion in fresh funds while SMI will gain some ownership in the toll roads.

“In this transaction, [Waskita] earns some cash and some shares. On paper, it is a gain, but, what [Waskita] can really use as working capital for upcoming projects, is only the Rp 515 billion in cash,”Artha Sekuritas analyst Dennies Christopher Jordan told The Jakarta Post on Wednesday.

Under the CSPA, SMI will also transfer its remaining 4.5 percent share of WTR valued at Rp 1.14 trillion to Waskita as additional funding for the construction company.

The two toll roads are among nine in total that Waskita plans to divest this year to help improve its finances after booking a Rp 7.38 trillion net loss last year, turning around the previous year’s net profit, as construction projects faced delays amid the pandemic. 

The company, traded under the ticker WSKT on the local bourse, saw its revenue stand at Rp 16.19 trillion, roughly a half its revenue in 2019, its latest financial report shows.

Read also: Construction SOEs set high targets for new contracts 

“This divestment is WTR’s strategy to optimize the toll road concession portfolio and speed up  toll road construction as part of its support for the government’s plan in infrastructure, especially toll roads,” said WTR president director Septiawan Andri in a statement on Tuesday.

The 75-kilometer-long Semarang-Batang toll road began operations in December 2018 while the 10.14-km-long Cinere-Serpong toll road began operations this year. The latter is a segment of the Jakarta Outer Ring Road II.

Waskita wrote in the statement that it aimed to raise between Rp 10 trillion and Rp 11 trillion through the nine divestments, with involvement from the recently established Indonesia Investment Authority (INA)

Eventually, the construction company wants to reduce its debt by at least Rp 20 trillion. Waskita’s total liabilities stood at Rp 89.01 trillion as of December 2020.

Read also: Indonesia taps seasoned banker to manage multibillion dollar sovereign wealth fund

INA, which manages the country’s sovereign wealth fund, is focusing first on toll road projects due to its huge multiplier effects before shifting to other infrastructure projects, according to chief executive officer Ridha DM Wirakusumah.

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