JAKARTA: State-owned airport operator Angkasa Pura II (AP II) is seeking Rp 2 trillion (US$150 million) in state capital injection (PMN) this year to expand Soekarno-Hatta International Airport, pledging not to ask for additional funds.
The capital injection will allow the company to borrow up to Rp 45 trillion from banks, up from the current limit of Rp 15 trillion, while keeping the debt to equity ratio (DER) at the save level.
“We are tied to a debt covenant to keep the DER below two. The company’s cash may be short this year, but the new investment will generate more cash flow. We guarantee this is the last injection,” said AP II president director Budi Karya Sumadi during a hearing with the House of Representatives on Wednesday.
Based on the company’s five-year plan, Rp 60.11 trillion in funds will be needed to finance necessary projects from 2016 to 2022, including the runway expansion at Soekarno-Hatta International Airport.
With the construction of the third runway set to be completed in 2017, the company will begin the land acquisition process for a fourth runway. It plans to get Rp 41 trillion in loans during the 2017-2020 period to finance the project.
“The fourth runway must enter operations at the latest in 2023, otherwise the airport will be badly congested,” Budi said.
