Aniket Pujari(Bloomberg) — Troubled Indonesian state-owned builder PT Wijaya Karya failed to repay the outstanding principals of two rupiah-denominated notes, a fresh signal that the country’s construction sector is still reeling from the financial consequences of a decade-long infrastructure push.
The company, which is the second-biggest construction firm by assets on the Indonesian stock exchange, did not pay principals from a conventional bond and from a Sukuk mudharabah issued in 2022, according to PT Bank Mega, the trustee of those notes, on Friday. Both papers matured on Feb. 18 and have a combined outstanding principal of 1 trillion rupiah ($61 million), Bloomberg-compiled data show.
Wijaya Karya already filed requests to creditors for extensions and to be able to partially repay the outstanding principals of the notes due to lack of funds, according to Mahendra Vijaya, its corporate secretary. “But up until now, WIKA has not obtained approvals on the requests in bondholders and sukukholders meetings,” Mahendra said on Monday. The company is planning to coordinate with the trustee to hold the meetings again and to approach the creditors to gain their approvals, he added.
The firm and other state-owned builders saw their total debt surge around 12-fold to around 130 trillion rupiah in a span of 10 years during former President Joko Widodo’s administration. Widodo made infrastructure projects in Southeast Asia’s largest economy a central part of his presidential legacy, but the heavy spending has left the companies struggling with repayment as rising interest rates push up financing costs and maturities loom.
Some of the state builders’ units are also facing legal pressure from creditors demanding their money back. PT Wijaya Karya Industri & Konstruksi, a subsidiary of Wijaya Karya, is currently facing a debt payment petition, which was filed by a creditor last week, a local court filing shows.
More stories like this are available on bloomberg.com
