Waskita Secures BBB+ Rating for Bonds, Expects Rp35t Project Revenue in 2020

Waskita secures BBB+ rating for bonds, expects Rp35t project revenue in 2020. State-owned construction company Waskita Karya’s (Waskita) maturing Rp 1.15 trillion (US$78 million) bonds have secured a BBB+ investment grade from Indonesian rating agency Pemeringkat Efek Indonesia (Pefindo).

The builder is expected to collect Rp35 trillion in project payments this year.

Pefindo expects Waskita Karya to repay its 2015 series B bond, which will be due on Oct. 16, using its internal cash obtained from construction projects, according to a Pefindo publication released on Wednesday.

Waskita finance director Taufik Hendra Kusuma said the company had received Rp12.5 trillion in infrastructure payments in the first half of 2020, mostly from turkey projects.

“We’ve received Rp7.1 trillion from turnkey project payments, with the biggest portion coming from the Jakarta-Cikampek II elevated [toll road] project,” he said in a press release on Thursday.

Construction on the Jakarta-Cikampek elevated toll road began in July 2017 and was inaugurated by President Joko “Jokowi” Widodo in December 2019. The elevated road spans around 36 kilometers and costs around Rp16.2 trillion.

Furthermore, Taufik said the company was also expecting a Rp4 trillion land acquisition repayment from the State Asset Management Agency (LMAN) by the end of the year, as well as Rp3.3 trillion from varying projects in the near future.

“We will use the funds to repay our maturing debt. Our BBB+ rating shows that Waskita can minimize any financial risks amid pressures from the COVID-19 pandemic,” he added.

As of March 31, Waskita has a cash balance of Rp6.1 trillion, compared to Rp4.1 trillion in maturing debts and Rp 7.9 trillion in unused credit facilities, according to Pefindo.

The World Bank, through its public expenditure report, had urged the government to reduce its dependence on state-owned construction companies for toll and national road development projects, as the companies are already overleveraged.According to the report, Waskita, toll road operator Jasa Marga and state builder Hutama Karya’s average liability-to-equity (LE) ratio stood at 3.8 in 2017, more than twice the average LE ratio for comparable private firms in emerging markets. Waskita secures BBB+ rating for bonds, expects Rp 35t project revenue in 2020 (Mardika Parama, The Jakarta Post)