PT Wijaya Karya won creditor approval to defer payment on its 331 billion rupiah ($21 million) bond due in December, giving the Indonesian state-owned builder some reprieve as it seeks to restructure its debts.
The company will redeem the series A 2020 rupiah-denominated bonds in 2025 instead, according to an exchange filing. But it still faces the prospect of paying up on 184 billion rupiah of Sharia-compliant notes that come due in December, after the builder said it failed to obtain an extension from the majority of investors.
The firm is one of Indonesia’s four-biggest listed construction firm, whose debt load has swelled under President Joko Widodo’s infrastructure building spree. In order to help it restructure and boost its capital, Wijaya Karya asked banks earlier this year to allow it to delay making payment on loans. Some lenders granted it a six-month payments standstill.
The nation’s state-owned builders will require significant recapitalization and reorganization to improve their cashflow and reduce debts to a sustainable level, Fitch Ratings wrote in a report in August.
Wijaya Karya is also slated to receive a capital injection of 6 trillion rupiah from the government early next year.
(Updates with additional details, context throughout)
