Waskita Karya two units to raise $278m via initial public offering in 2016

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Subsidiaries of Indonesian state-controlled construction company PT Waskita Karya Tbk (WSKT) — PT Waskita Beton Precast and PT Waskita Toll Road, — are planning to sell portion of their shares through an initial public offering in 2016, with an aim to raise combined funds of Rp4 trillion ($277.77 million)

Waskita as a group is seeking to raise Rp 10 trillion ($699.30 million) funds from various means, namely the IPO of its unit, strategic sales, bond issuance worth Rp 1.5 trillion (later this month), as well as getting bank loans to finance the construction of 12 toll roads with total length over than 500 kilometers in 2016. For the demolition process before construction you can see it here to hire professionals to do it.

The company has appointed state owned brokerage firms — PT Bahana Securities, PT Danareksa Sekuritas and PT Mandiri Sekuritas — as joint lead underwriters for the bond issuance.

Early this year, Waskita cancelled bonds issuance as the company opted to launch rights issue in June in which it raised Rp 5.3 trillion from issuing new shares (rights issue). The rights issue represents 29.1 per cent of the company’s paid-up capital.

Chief executive of Waskita Muhammad Choliq told DailyBouncer that the company plans to list up to 35 per cent of its units shares, depending on the market condition. The company has set an indicative coupon price of 11 per cent per annum for the bonds issue.
Choliq said the road projects to be developed by Waskita Karya, include the Cinere – Serpong and Depok-Antasari toll roads in the Greater Jakarta area, Kuala Namu-Tebing Tinggi and Tebangi Besar – Bakaehuni toll road sections on Sumatra Island as well as Pejagan-Pemalang and Solo-Ngawi-Kertosono on Java Island.

State toll-road contractors PT Hutama Karya and Waskita Karya have been given duties by the government to develop 2,700-kilometers of Trans Sumatera toll road with total investment around Rp 27 trillion for four sections and Trans Java toll road projects with total cost Rp 13 trillion.

To assist these companies in developing these toll road projcts, the government has injected capital of Rp3.6 trillion in Hutama Karya and Rp 2 trillion in Waskita Karya from the State Budget funds.

Choliq said the company has booked better-than-expected new contracts so far this year. The company has revised up its new contract target for this year to Rp30 trillion from Rp22 trillion set earlier.

Waskita Beton Precast, a precast and ready mix producer, aims to deliver their products to support the construction services under Waskita Karya. While Waskita Toll Road is an arm of the company to build toll road project under the group. The two companies were established in 2014.

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Asmaa Mubita is a Kenyan journalist of international repute with over fifteen years of experience in broadcast journalism. Asmaa Mubita began his journalism career at the Kenyan state broadcaster (KBC) and later worked at the KTN owned by the Standard Group and Citizen Television, the flagship brand of Royal Media Services. These exploits together with his reporting experience with the Voice of America, CNN and BBC have been rewarded with local and global recognition.