BUMN Ministry to Tighten Bonds Issuance After Downgrade of WSKT and WIKA

Jakarta, CNBC Indonesia – Minister of State-Owned Enterprises (BUMN) Erick Thohir revealed, his party will tighten the issuance of bonds to state-owned companies whose shares are also listed as issuers on the capital market.

In this case, the BUMN ministry will cooperate with the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX). This was done because several state-owned construction companies such as PT Waskita Karya (Persero) Tbk. (WSKT) and failed to pay bond coupons and PT Wijaya Karya (Persero) Tbk. (WIKA) experienced a downgrade.

“Especially for BUMN bonds, we will tighten it,” said Erick in a Working Meeting with Commission VI of the DPR, Monday (5/6).

The hope is that the OJK and the IDX can issue one vote regarding the plans of state-owned companies when they will raise funds through the issuance of debt securities. This is done to minimize the risk of default for SOEs that are raising funds

“That the issuance of bonds and debentures is really the three of us must really agree. That it is legal, so it’s not just publishing,” he said.

PT Waskita Karya Tbk (WSKT) admitted that it could not make a deposit to the Indonesian Central Securities Depository (KSEI) due to the maturity date of the 11th bond interest payment on May 6, 2023.

PLT Managing Director Waskita Karya (WSKT) Mursyid in an official statement submitted to the Indonesia Stock Exchange (IDX) Friday (5/5), stated that the failure to pay interest on the maturing bonds was due to the failure to obtain approval from the Bondholders of PUB IV Phase I Year 2020 series B for a request to postpone interest payments from May 6, 2023 to August 6, 2023.

Meanwhile, the rating agency Pefindo has downgraded the ratings of PT Wijaya Karya (Persero) Tbk’s Shelf Registration Bonds I, II, III and Shelf Registration Sukuk Mudharabah I, II, III. (WIKA). As well as, giving an idBBB rating with the Negative Outlook category from previously idA with the Stable Outlook category.

Quoting the disclosure of information on the Indonesia Stock Exchange (IDX), one of the reasons for the downgrade is the very aggressive capital structure and insufficient liquidity to meet maturing short-term debt obligations.

This is due to the Company’s prolonged operating cash cycle and high capital expenditure from its investments.

Regarding the Company’s obligations to debt holders, until now the Company is still able to fulfill its obligations, most recently the Company is still paying coupon obligations for Bonds and Sukuk Mudharabah I phase I Year 2022 on May 16, 2023 with a value of IDR 46.5 billion.

(fsd/fsd)