Govt to make Waskita Karya subsidiary of Hutama Karya
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
The Jakarta Post - Pemerintah akan menjadikan Waskita Karya anak perusahaan Hutama Karya
16 August 2023
By: Yohana Belinda
Jakarta - The government plans to make state-owned construction firm PT Waskita Karya a subsidiary of another state-run company, following a debt restructuring of the company.
Deputy State-Owned Enterprises (SOEs) Minister Kartika Wirjoatmodjo told reporters on Monday that the government expected to conclude Waskita Karya's debt-restructuring process early next year.
After the restructuring ends, the government will transfer its share in Waskita Karya to state-owned construction firm Hutama Karya through a private placement, he said. Therefore, Waskita Karya will become a subsidiary of Hutama Karya.
"We hope this can be concluded next year," Kartika said.
Waskita Karya is struggling to pay its debts and expenses. On Aug. 6, Waskita Karya missed debt repayments to its bondholders.
In May, Waskita Karya also failed to make timely coupon payments on its corporate bonds, causing the Indonesia Stock Exchange (IDX) to announce another trading halt on its shares.
The ministry is currently negotiating with banks to extend Waskita Karya's debt repayment for 10 years, which Kartika said was almost concluded. Another negotiation is also underway with Waskita Karya's bondholders and vendors, he said.
Kartika said the government also planned to shift a state-capital injection, which was initially allocated for Waskita Karya, to Hutama Karya.
Some of the injection will flow to Waskita Karya's toll road projects with another portion to be used to conclude vendor payments, he said.
Waskita Karya's financial performance has deteriorated as a result of several projects, according to the ministry on May 24. Among those are the Kayu Agung-Palembang-Betung toll road in Palembang and the Bekasi-Cawang-Kampung Melayu (Becakayu) toll road in Greater Jakarta.
PT Sarana Multi Infrastruktur (SMI), an infrastructure financing firm under the Finance Ministry, is keen to assist in the financing of the Bogor-Ciawi-Sukabumi (Bocimi) toll road project, also one of Waskita Karya's ongoing projects, Kartika said.
The Bocimi toll road is one of many projects that Waskita Karya is seeking to divest in order to improve its financial condition along with the Kapal Betung and Becakayu toll roads.
"However, it is important is to complete these projects, as they cannot be divested if they are incomplete," he said, adding that Hutama Karya would be the company handling these projects.
Another state-owned construction firm PT Wijaya Karya (WIKA) also requested a postponement of its debt repayments in May, which creditors granted because the company's financial situation was considered less risky than Waskita Karya's.
However, Kartika said the government had yet to decide whether it will conduct a similar restructuring scheme to WIKA.
"WIKA's [situation] is relatively manageable, however the Waskita Karya situation is really serious," Kartika said.
