JAKARTA. PT Adhi Karya is confident its rights issue will be fully subscribed as the State Insurance Association (Asgara) has expressed an interest in the state-owned construction company’s new shares.
Adhi Karya president director Kiswodarmawan confirmed that Asgara had expressed its interest in buying a proportion of his firm’s new shares to be offered in a preemptive rights issue next month.
“In a case where our foreign shareholders don’t buy the new shares, Asgara is committed to buying some of the new shares offered to the public,” he said on Monday after a closed-door meeting at the State-Owned Enterprises Ministry.
Asgara is an association comprising a number of state-run insurance companies, such as Taspen, BPJS and Jasa Raharja.
Adhi, listed on the Indonesia Stock Exchange (IDX) as ADHI, is 51 percent owned by the government and the remaining 49 percent by the public.
Kiswodarmawan said the company had conducted a roadshow in a number of cities and countries where its foreign investors were based, such as Hong Kong, Singapore and Malaysia regarding the rights issue plan.
The construction firm plans to have a preemptive rights issue next month to reap a total of Rp 2.75 trillion (US$203.8 million), of which around Rp 1.35 trillion will come from existing public shareholders and Rp 1.4 trillion from the government through a capital injection.
The new shares will be priced at between Rp 1,510 and Rp 2,400, lower than the initial price range set at around Rp 2,000 to Rp 2,700.
“We decided to lower the price to accommodate the market. We realize that there is such huge volatility in the stock market at the moment,” Kiswodarmawan said.
The plan for a rights issue is subject to approval from an extraordinary shareholders meeting that will take place on Aug. 27.
Adhi will use the funds from the rights issue to partly finance the first development phase of its light rail transit (LRT) that will cost around Rp 12.5 trillion.
Kiswodarmawan said the LRT project would kick off soon once a presidential regulation on the acceleration for the development of rail-based transport was issued.
“We hope the regulation can be issued before the country’s Independence Day,” he told reporters.
The first phase of the LRT project will connect East Bekasi in West Java with Dukuh Atas in Central Jakarta, and Cibubur (West Java) with Cawang (East Jakarta).
The next phase of the development, meanwhile, is set to connect Dukuh Atas with Palmerah (Central Jakarta), Cibubur with Bogor (West Java), and Palmerah with Grogol (West Jakarta).
The project is expected to cost between Rp 35 trillion and Rp 40 trillion, of which 20 percent will come from Adhi’s reserves and the remaining 80 percent will come from loans, the firm has previously stated.
Adhi booked a total of Rp 6.1 trillion in new contracts in the first half of this year, with 86 percent coming from its construction business and 14 percent from other business lines.
Of the total new contracts, 49 percent are private-sector projects, 15 percent from state-owned enterprises and 36 percent from state or regional budgets, according to the firm’s internal data.
Adhi’s revenues rose by 0.6 percent to Rp 3.21 trillion in the first six months of this year from Rp 3.19 trillion in the same period last year.
The firm’s net profits surged by 17.6 percent year-on-year to Rp 70.44 billion in the Jan.-June period of this year from Rp 59.9 billion last year. (Khoirul Amin)
