Jakarta, Marketmover – PT Waskita Karya Tbk (WSKT) canceled the planned issuance of IDR 3.5 trillion bonds, which is part of the ongoing IV bonds in 2019 worth a total of IDR 4.95 trillion.
The state-owned enterprise apparently prefers to seek Rp 1 trillion in debt from PT Bank Rakyat Indonesia Tbk (BBRI) for working capital. The company also plans to restructure Rp 5-6 trillion in long-term debt and seek a global underwriter.
“The company has not yet decided on a new schedule for the issuance of Rp 3.5 trillion in bonds,” Bloomberg wrote, recently.
Previously, in the prospectus, Waskita would use the proceeds from the bonds for working capital for civil building construction, Sumatra 500 KV transmission construction needs, as well as for the costs of purchasing construction land, equipment rental costs, subcontractor fees and labor costs.
Pefindo noted, the outlook for the company’s rating is stable. Bonds rated idA have a stronger ability than other Indonesian obligors to meet their long-term financial commitments. However, the ability of obligors may be affected by adverse changes in circumstances and economic conditions compared to higher ranking obligors.
While the sign – in the Waskita rank indicates that the rating is relatively weak and below the average of the respective category. The rating is constrained by the company’s high financial leverage, a fairly volatile business environment in the construction industry, and risks related to the company’s aggressive expansion in the toll road business and divestment plans. (mm2)