Indonesia To Inject IDR 30T To Aid Construction Firms

In accordance with an official, Indonesia's state-owned enterprises ministry plans to increase equity investments in two construction firms by 30.5 trillion rupiah ($2.05 billion) by 2024 to help ease companies' financial difficulties.

The plans were revealed during a hearing with the parliament's committee in charge of overseeing state investments. Parliament must approve any capital injection into state-owned enterprises.

The government intends to inject 12.5 trillion rupiah into Hutama Karya, which is fully owned by the government, by early 2024 so that it can take over two toll road projects from builder Waskita Karya, which is having difficulty repaying its debt, according to deputy minister Kartika Wirjoatmodjo.

The finance ministry withheld a 3 trillion rupiah capital injection for Waskita, despite the fact that the capital injection was approved for fiscal year 2022, after the company failed to secure bondholder approval to postpone a coupon payment due in May.

Waskita's securities trading was halted last month for the second time this year due to a failed negotiation with bondholders.

"We are not ruling out the possibility of topping up (the capital injection proposal) in the event of increased restructuring needs." "We are recalculating and discussing with the finance ministry how far we will go in terms of capacity required to restore Waskita's health," Kartika said.

Another 8 trillion rupiah equity injection was requested for state-controlled Wijaya Karya (Wika) to strengthen its capital position, while the firm negotiates its debt, said Kartika.