Greenlighted, Waskita prepares new restructuring scheme
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 - Dapat lampu hijau, Waskita siapkan skema restrukturisasi baru
7 September 2023
By: Muawwan Daelami
Jakarta - The general meetings on Continuous Bonds III Phase II Year 2018 and Continuous Bonds III Phase IV Year 2019 of PT Waskita Karya Tbk (WSKT) have set a deadline for the company to complete its restructuring. The additional time provides an opportunity for Waskita to continue the master restructuring agreement (MRA) review process by implementing the equal treatment policy for all creditors. Waskita’s management hopes that the obligors can approve the company’s proposed restructuring scheme at the next meeting.
Besides continuing the MRA review process, the additional time will allow the company to preserve their cash to maintain operation and review the MRA implementation as well as the plan to settle their obligations to creditors. The company is currently in a process to obtain an approval for their proposed restructuring scheme from banking creditors.
“The company has prepared a plan and is ready to take strategic steps, which include reorganising the restructuring documents and signing the restructuring scheme that is currently being approved by creditors,” Waskita Corporate Secretary SVP Ermy Puspa Yunita said in her official statement on Wednesday (6/9/2023).
At the general meeting, the company must obtain an approval from 75% of the quorum. The approval at the general meeting on Continuous Bonds III Phase II Year 2018 reached 78.88%. Meanwhile, the approval at the general meeting on Continuous Bonds III Phase IV Year 2019 reached 97.66%.
“We hope that the results can lift the stock suspension. The strategic steps that have become the company’s commitment are expected to restore Pefindo’s rating,” Ermy revealed.
Waskita also has several other continuous bonds lined up, such as Continuous Bonds III Phase III Year 2018 and Continuous Bonds IV Phase I Year 2020. Referring to the decision made at the last general meeting, Waskita hopes that other obligors can support and approve the company’s recovery through the restructuring scheme.
Government support
Moreover, Emmy admits that Waskita is also asking for support from the government through state equity participation (PMN), new infrastructure project contracts in Nusantara Capital City (IKN), and strategic partnerships for toll road segments. Waskita is currently prioritising projects that have a down payment, monthly payments, and an approval from the Construction Risk Management Committee so that the projects can be completed on time, which will positively impact Waskita’s finances.
“It is the company’s effort to maintain the trust of all obligors that Waskita can still be trusted to work on infrastructure projects to positively impact its business revenue, which will benefit the company’s cash flow,” she stated.
Open stock suspension
Meanwhile, Indonesia Stock Exchange (IDX) is considering lifting Waskita’s stock suspension in accordnace with the positive restructuring signal from the company’s creditors.
IDX has suspended WSKT’s stock trade since 8 May 2023 as the state-owned construction issuer failed to make their bond interest payment. Until June 2023, Waskita’s liabilities have reached Rp84 trillion, which consist of short-term debts worth Rp22.7 trillion and long-term debts worth Rp61.5 trillion. IDX Corporate Assessment Director I Gede Nyoman Yetna stated that IDX would consider lifting Waskita’s stock suspension if the company has completed their restructuring obligations to all creditors, which include banking creditors, trade, and bondholders.
“After the company has announced their restructuring scheme and final term sheet from the MRA that has been approved by all creditors, the exchange can consider lifting the stock suspension,” Nyoman said in his official statement on Wednesday (6/9/2023).
Good intention
Stock market observer Reza Priyambada reckoned that the restructuring effort implemented by Waskita Karya’s management showed that company still has some good intention to settle their bond debt rather than having the company go bankrupt. “Even though the restructuring effort cannot be completed in a short time, there is at least some good intention from Waskita to recover the company’s performance,” Reza said to Investor Daily on Wednesday (6/9/2023).
Reza added that market players could not carelessly respond to Waskita’s decision as they want to see proof from the company’s performance first. “The most important thing is the strategic steps of Waskita’s management after the restructuring, including the SOE (State-owned Enterprises) Ministry’s support that must provide a positive support. It is what is expected by market players,” Reza stated.
