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Waskita Karya inks deal to restructure $2 billion in loans
State-owned construction company has secured a restructuring deal with 21 banks for a total of Rp 29.2 trillion in loans.
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tate-owned PT Waskita Karya has now reached a deal with 21 banks to restructure Rp 29.2 trillion (US$2.05 billion) in loans as Indonesia’s largest construction company seeks to revive its performance following a downturn during the pandemic.
Waskita signed on Sep. 15 a restructuring agreement with 14 banks, including state-owned, local and foreign banks such as Bank Mandiri, China Construction Bank Indonesia and Panin Bank. The agreement completed the restructuring process that began on Aug. 25 with seven banks, which accounted for nearly two-thirds of the loans.
Read also: Waskita signs major loan restructuring deal
Waskita president director Destiawan Soewardjono said the restructuring was especially necessary because July’s COVID-19 resurgence had either delayed or halted construction projects, prompting creditors to stop disbursing funds and investors to cancel visits.
“This is a very important moment for Waskita to revive its business process and return the company to the performance it once achieved,” Destiawan said in an online press conference on Monday.
Waskita has over Rp 90 trillion debt in total, in part because the company has invested in 19 sections of the government’s flagship trans-Java and trans-Sumatra toll road projects, according to the president director.
The pandemic has put pressure on Waskita, causing the company to book a net loss last year. But the construction company booked Rp 41.02 billion in net profits in the first six months of this year, reversing the net loss in the same period last year.
Destiawan said the company would diversify away from costly toll road projects and introduce down payments and monthly installments for new infrastructure projects to improve its cash flow. Most of Waskita’s current projects are on a turnkey basis, where payments are only received fully after projects are completed.
Aside from toll roads, Waskita develops airports, bridges, power plants and water reservoirs, among other forms of infrastructure.
The company has set a target of booking a 25 percent compound annual growth rate in the next four years.
“Waskita also has the full support of the government, which provides a guarantee for working capital and bonds that will mature in 2021 and next year,” said Destiawan. “This is the government’s commitment to helping Waskita recover its performance.”
Read also: Indonesia to spend big on infrastructure amid pandemic pressures
The government provided a Rp 7.9 trillion state capital injection in 2021 and plans to provide an additional Rp 3 trillion in 2022 to boost Waskita’s equity, as the company is still working on seven toll road projects. The government also provided a Rp 15 trillion temporary credit guarantee to streamline the company’s debt-restructuring process.
