JAKARTA: State-run construction company PT Waskita Karya says it will need Rp 10 trillion (US$700.75 million) next year for the development of several toll roads with a total length of 500 kilometers, according to its top executive.
The money to finance the projects will be raised by issuing bonds and offering one of its subsidiaries to the stock market.
Waskita president director M. Choliq confirmed on Wednesday the company will disburse around Rp 10 trillion for the toll road project next year. Aside from the sale of its subsidiary PT Waskita Beton and bonds issuance, Waskita would also expect state-capital injections to be a source of funds.
Choliq said the company would proceed with its plan to issue bonds amounting to Rp 1.5 trillion this year. It postponed the bonds issuance in August due to the unfavorable capital market at the time.
The bond issuance was part of the company’s Rp 2 trillion bonds issuance plan with Rp 500 billion having been issued late last year.
“We decide to resume the plan and issue the bond this month or next month, because we will need a lot of money for toll road projects next year,” he said.
Choliq said that Mandiri Sekuritas, Bahana Securities and Danareksa Sekuritas would be underwriters for the bonds issuance. He said, however, that the coupons and tenor for the bonds had yet to be determined.
The funds will be used to finance a number of planned toll road projects that will span 500 kilometers in total.
The toll road projects, Choliq said, would include the 57.5-kilometer Pejagan-Pemalang and the 39-kilometer Pemalang-Batang toll roads in Central Java, the 10-kilometer Cinere-Serpong in Banten, as well as the Solo-Ngawi and Ngawi-Kertosono toll roads that will connect Central and East Java.
Most of the projects are part of the Trans Java toll road project, which will connect the easternmost and westernmost toll roads in the country’s most populous island.
Meanwhile, Waskita is among state-run companies that received state-capital injections this year, and had raised Rp 5.3 trillion of capital through a right issues in June.
Choliq said the remainder of the fund was expected to come from proceeds of the initial public offering held by its precast-concrete subsidiary Waskita Beton.
He said he hoped Waskita Beton could enter the stock market next year and, through the public offering, he expected that the subsidiary could raise around Rp 4 trillion from the capital market.
“However, the IPO plan will be contingent on stock market conditions next year, although we are pretty optimistic that the stock market will improve by then,” he said.
This year, the company aims to work on toll roads worth a combined investment of Rp 40 trillion, and Choliq said that Waskita had secured all projects needed to meet the target.
The latest addition, he said, was the Solo-Ngawi-Kertosono toll road, which Waskita and state-run toll operator Jasa Marga took over from Thiess Contractors earlier this year, and the Pemalang-Batang toll road that was currently under acquisition.
The total investment needed to construct the 90-kilometer Solo-Ngawi section stands at Rp 5.14 trillion, while the investment for the 87-kilometer Ngawi-Kertosono section will require Rp 3.83 trillion.
Choliq said that his company was currently finalizing acquisition of the Pemalang-Batang toll road from its previous right holders, with the aim of owning 60 percent of the project with around Rp 5 trillion worth of business-to-business deals.
