INA interested in acquiring 35% shares in Jasamarga Transjawa toll road
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 - INA berminat akuisisi 35% saham Jasamarga Transjawa Tol
10 October 2023
By: Muawwan Daelami
Jakarta - Indonesia Investment Authority (INA) is interested in acquiring 35% of the shares of PT Jasamarga Transjawa Tol (JTT) from PT Jasa Marga Tbk (JSMR). JTT is the toll road business entity that operates Trans-Java toll road spanning 676 km, reflecting 56% of the total length of toll roads managed by Jasa Marga Group.
State-owned Enterprises (SOE) Deputy Minister Kartika Wirjoatmodjo revealed that Jasa Marga’s portion in JTT that will be offered to strategic partners reached 35%. The equity financing activity is meant to finance the company’s toll road projects in the future.
INA Deputy CEO Arief Budiman admits that his party with several investment partners was continuously monitoring and evaluating toll segments all over Indonesia to see future investment opportunities.
“[INA] is currently holding discussions with several toll road owners, such as Jasa Marga and Hutama Karya,” Arief said to Investor Daily on Monday (9/10/2023).
In response, Jasa Marga President Director Subakti Syukur said that JTT’s equity financing activity was still being prepared through discussions with potential strategic partners and stakeholders.
“We cannot provide further information on the shortlisted bidders and the consortiums involved. However, we can ensure that JTT’s equity financing is an equity-based funding strategy that can be used as an alternative long-term infrastructure funding [source] in the future,” Subakti revealed to Investor Daily on Monday (9/10/2023).
The state-owned toll road issuer owns 99.00% of the shares of JTT that was established on 2 June 2017. Until 30 June 2023, JTT’s assets have reached Rp29.36 trillion, which increased from Rp26.04 trillion in the previous year.
According to the official website of JTT, the company currently manages Trans-Java toll road segments and has share participation in subsidiaries and associations that own Trans-Java toll road concessions. JTT also acts as an asset manager that holds authority over subholdings, representative offices, and subsidiaries with a work scope that includes planning, managing, monitoring, supervising, and evaluating.
JTT’s regional scope currently covers four toll roads and nine toll roads of subsidiaries that have operated. The four toll roads are Jakarta-Cikampek, Palimanan-Kanci, Semarang Sections A, B, and C, as well as Surabaya-Gempol.
JTT is also operating nine other toll roads through subsidiaries, namely Jakarta-Cikampek II Elevated, Batang-Semarang, Semarang-Solo, Solo-Ngawi, Ngawi-Kertosono-Kediri, Surabaya-Mojokerto, Gempol-Pasuruan, Gempol-Pandaan, and Pandaan-Malang.
Releasing 35% shares
According to Kartika Wirjoatmodjo, the SOE Ministry has decided to take the strategic partnership route to carry out JTT’s equity financing activity. The toll roads managed by JTT are operational and mature. JTT’s search for strategic partners has been conducted since May 2023 by making open offers.
Jasa Marga Corporate Communication and Community Development Group Head Lisye Octaviana also added that JTT’s equity fundraising was a part of the series of spin-offs of Trans-Java toll road segments that are conducted to strengthen the company’s financial fundamentals and sustainability in the future. “The strategic initiative that has been prepared since 2020 is stated in the company’s long-term plan. Traffic recovery and economic growth in the Trans-Java toll road network are excellent in the long term,” she said.
Hence, Lisye believes that the company’s performance target in 2023 will be realised. Revenue growth from the toll road business is expected to reach 10%-15%. The optimism is supported by several strategic incentives, such as performance growth maintenance and financial health management.
In terms of the top line, Lisye said that Jasa Marga was optimistic about thier revenue growing after fulfilling the minimum service standards. “Hence, tariff adjustment is expected to be carried out as planned,” she stated.
On the other hand, the company is also maintaining its EBITDA growth by allocating its budget effectively and efficiently to implement suitable work programmes.
Buy recommendation
Meanwhile, Mirae Asset Sekuritas Senior Investment Information Nafan Aji Gusta recommends buying JSMR shares at a target price of Rp4,200. He said that the previous target price has been achieved.
He is also appreciating the equity fundraising activity that the company is conducting for JTT. The completion of the fundraising activity is only a matter of time. At least, Jasa Marga can take advantage of the increase in the people’s mobility in relation with the election campaign momentum in November.
“So, it can increase the mobility of land transportation so that vehicle volume will grow progressively,” Nafan said.
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