(Bloomberg) -- Indonesia plans to inject 20.5 trillion rupiah ($1.4 billion) worth of fresh capital into its beleaguered builders, after two state-backed firms sought to restructure their heavy debt loads amid a pileup in losses.
PT Wijaya Karya is due to receive 8 trillion rupiah, while closely held Hutama Karya will receive 12.5 trillion rupiah, deputy minister of State-Owned Enterprises Kartika Wirjoatmodjo told lawmakers on Monday, adding the funds were earmarked for 2024. For the latter firm, the infusion would come on top of an already-proposed lifeline of 10 trillion rupiah.
Hutama Karya will use the additional money to take over toll road projects from another troubled builder, PT Waskita Karya, he said.
The country’s four-biggest listed construction firms, including PT Waskita Karya and PT Wijaya Karya, have seen their debt load swell as a result of President Joko Widodo’s drive to expand infrastructure. It reached around 130 trillion rupiah at the end of the first quarter.
Wijaya Karya has asked banks to allow it to delay making payments on its liabilities, while Waskita Karya got approval from investors to defer payments on three rupiah-denominated bonds, part of a larger debt restructuring.
Parliament still needs to sign off on the plan.
©2023 Bloomberg L.P.
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