PT Wijaya Karya won investors’ approval to defer payment for its 331 billion rupiah ($21 million) bonds due in December, giving some reprieve to the Indonesian state-owned builder amid a ballooning debt burden in the sector.
The company will redeem the series A 2020 rupiah-denominated bonds in 2025 instead, it said in an exchange filing late Tuesday. However, the builder also said it failed to get permission from investors to delay payment on its Sharia-compliant bonds, which are also due in December.
Wijaya Karya is one of Indonesia’s four-biggest listed construction firms which have seen their debt load swell to support President Joko Widodo’s ambitious infrastructure plans. The government has said it may take at least three years to resolve the crisis.
The Sharia-compliant bonds, also known as Sukuk, have an outstanding value of 184 billion rupiah, according to data compiled by Bloomberg. Wijaya has the option for early repayment of all or part of the series A 2020 bonds, which will still carry a coupon of 8.6%.
Some lenders have granted the company a standstill on its bank loan payments as it seeks to reorganize debt and strengthen its capital. Wijaya Karya is also slated to receive a capital injection of 6 trillion rupiah from the government to help it complete ongoing national priority projects.
--With assistance from Harry Suhartono.
