(Bloomberg) -- Indonesian builder PT Waskita Karya reached an agreement with lenders to restructure 26.3 trillion rupiah ($1.7 billion) worth of loans, about a third of its total liabilities, relieving some pressure from the distressed company.
Waskita Karya signed a master restructuring agreement with 21 local and international banks to extend their loans’ maturity period by 10 years to 2032, President Director Muhammad Hanugroho said in Jakarta on Friday.
The deal with the banks, including PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia and PT Bank OCBC NISP, will lower the interest rate on the restructured loans to 3.5%, from 5% previously.
The company also revised a separate working capital loan agreement with five lenders totaling 5.2 trillion rupiah, it said in a statement. As of the end of June, Waskita Karya has total liabilities of 82 trillion rupiah, according to its financial statement.
Indonesian state builders have struggled to pay back debts, which ballooned over the past decade on President Joko Widodo’s aggressive infrastructure push. The pandemic also turned the sector into a hotspot for distress as it put many projects on hold. A corruption charge against Waskita Karya’s former chief dealt another blow to the company.
Waskita Karya — Indonesia’s largest state builder based on assets — has missed payments on some bonds and is still waiting to get approval to restructure its rupiah notes due May 2024. Trading of its shares remain suspended on the local bourse.
To reduce its liabilities, Waskita Karya will focus on selling some assets, including 10 toll roads operated by its unit. PT Waskita Toll Road was a key contractor for President Jokowi’s Trans Java project which helped connect the main island in the world’s largest archipelago.
Another state-owned builder PT Wijaya Karya earlier this year signed an agreement to restructure 20.8 trillion rupiah of debt.
(Updates throughout with details of the restructuring agreement, background)
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