Indonesian Parliament Approves US$ 1.8 Billion Capital Top-Up for State Firms in 2024

STATE BUDGET - JAKARTA. The Indonesian parliament's financial committee on Monday approved a 28.2 trillion rupiah ($1.82 billion) capital injection for several state companies by 2024, including for debt-strapped construction firms.

The committee also approved a 36.8 trillion rupiah ($2.37 billion) capital injection for several state firms for this year, the committee said in a livestreamed meeting.

Construction firm Hutama Karya will receive the biggest chunk amounting to 28.9 trillion rupiah this year and 18.6 trillion next year.

Authorities have said Hutama Karya will be tasked with taking over some of the assets of troubled construction firm Waskita Karya.

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Another debt-laden construction company, Wijaya Karya , will get 6 trillion rupiah next year.

However, the 2024 capital injection was below an original proposal of 22.5 trillion rupiah for Hutama Karya and 8 trillion rupiah for Wijaya Karya.

Waskita and Wijaya Karya, among Indonesia's biggest construction firms, have been renegotiating their debt with lenders. The companies are overleveraged having been assigned by the government to build massive infrastructure projects.

Trading in Waskita shares has been suspended since May after it failed to secure bondholder approval to defer a coupon payment.

The committee also struck down a 10 trillion rupiah cash injection to state utility Perusahaan Listrik Negara (PLN).

Finance Minister Sri Mulyani Indrawati said the government will review the urgency of such support for PLN after the decision.

Hutama, Waskita, Wijaya Karya and PLN did not immediately respond to a request for comment.

($1 = 15,520.0000 rupiah)