Indonesian state-owned lenders have some of the biggest exposure to PT Waskita Karya, the construction company meeting with bondholders this week as it seeks to restructure its finances.
(Bloomberg) — Indonesian state-owned lenders have some of the biggest exposure to PT Waskita Karya, the construction company meeting with bondholders this week as it seeks to restructure its finances.
Government-controlled banks have 29.3 trillion rupiah ($1.93 billion) of loans to the construction company, according to Waskita’s latest consolidated quarterly report for late September. That’s more than half the firm’s bank debt of worth 47.2 trillion rupiah. Total liabilities amounted to 82.4 trillion rupiah, it showed.
Waskita, the country’s largest construction company, became highly indebted following President Joko Widodo’s infrastructure spending spree. It has a 2.3 trillion rupiah note due on Feb. 23. but must make the payment without any money raised from new bonds and sukuk, as it scrapped the issuance.
The firm’s planned sale of new shares got postponed to later this year after a stock market slump.
The builder wants to amend the terms of that bond and other non-government guaranteed debt securities at a meeting with investors on Thursday and Friday in Jakarta.
Bank Tabungan Negara lent to Waskita’s property unit, not the parent, and it is “confident” about the residential real estate business, Vice President Director Nixon Napitupulu, told Bloomberg in a response to a question about the lender’s business.
Bank Rakyat Indonesia classified loans to Waskita as performing. But going forward, the loans would be restructured in accordance with the cash flow situation, the bank’s corporate secretary Aestika Oryza Gunarto said.
Representatives for Bank Negara Indonesia, Bank Mandiri, and Bank Syariah Indonesia did not responded to a request for comment from Bloomberg. Representatives for Waskita Karya did not respond to Bloomberg’s request for comment on Thursday.
The government was pushing for a “fundamental restructuring” of Waskita Karya, Deputy State-Owned Enterprises Minister Kartika Wirjoatmodjo told Bloomberg earlier this month when asked about the state builder’s debts.
–With assistance from Fathiya Dahrul.
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