Strengthening capital, Jasa Marga approaches potential investors
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.
Investor Daily - Perkuat modal, Jasa Marga dekati investor potensial
14 November 2022
PT Jasa Marga (Persero) Tbk (JSMR) is exploring various fundraising models to strengthen the company’s capital structure. Recently, the toll road issuer approached potential investors regarding the status of their subsidiary, PT Jasamarga Transjawa Tollroad (JTT), that has conducted a spin off.
Jasa Marga Corporate Communication and Community development Group Head Lisye Octaviana revealed that, until now, the company cannot ensure which funding option is chosen among initial public offering (IPO) or others as they are still being discussed by directors, commissioners, and the State-owned Enterprises (SOE) Ministry.
If it is IPO, the market potential must be observed first. Hence, the market checking and dissemination process still continues. The company is also continuously intensively discussing with investor relations and analysts.
“Moreover, our directors are currently holding a discussion with the SOE Ministry to talk about the potential investors. So, we are checking the market. We must see whether or not IPO is chosen for the equity financing. So, I cannot jump the gun by saying it is IPO while it is still multifinancing,” Lisye explained to answer Investor Daily recently.
He also cannot mention the potential investors as he does not want to jump the gun. However, one thing is for sure, JTT’s business is attractive to investors.
Based on the data collected by Investor Daily, JTT’s division has four operating toll road segments with the concessions held by Jasa Marga and nine toll road enterprises (BUJTs) of the company. Traffic on trans-java toll segments is also reckoned to continuously grow. Moreover, JTT’s spin off from Jasa Marga will open space for the creation of added value optimally. Moreover, the purpose of JTT’s spin off is to strengthen the corporation’s capital structure to be healthier.
“Now, we have several ongoing projects. We also learned that, from several years ago, when a toll road operates, the project’s debt structure must be recorded,” Lisye said.
Then, seeing the business model, when a toll road project operates, the cashflow will be low, and the spending will be quite high when the project is consolidated. “We are preparing it so that the spending will not be too much, so the cash position will remain healthy in the future,” he affirmed.
Besides JTT, another Jasa Marga’s subsidiary that is said to be listed on Indonesia Stock Exchange (IDX) is PT Jasa Marga Related Business (JMRB). Lisye explained that each of the company’s subsidiary prepares their plan and state their business plan to the holding, including JMRB’s IPO plan that has been discussed clearly.
“So, JMRB’s IPO has been discussed. However, the IPO will not be conducted soon as it needs time to create a growth story. Currently, rest areas have started to improve, the same goes for toll road development and fibre optic. However, due to the Covid-19 pandemic, the plan is hindered,” he concluded.
