JSMR will sell two toll roads

JAKARTA. PT Jasa Marga Tbk (JSMR) is in need of a huge amount of funds. After obtained Rp 1.8 trillion from the rights issue, JSMR will sell two toll road lanes, namely JORR W1 and Trans Marga Jateng toll road lanes.

JSMR is planning to sell a 10%-15 % of the company’s shares in the lane of Trans Marga Jateng toll road. As of 30 September 2016, this state owned toll road operator secured 73.9% of Trans Marga Jateng’s shares.

JSMR is also planning to sell its entire stakes in JORR W1. To date, JSMR owns 195 of JORR W1 shares. “In total, we hope to book more than Rp 1 trillion,” Said Financial Director of JSMR Anggiasari Hindratmo, Monday (19/12).

However, she refused to mention the transaction value of each toll road. Anggia only mentioned that JORR W1 has major contribution for JSMR.

Aside of selling the two toll roads, JSMR will launch the sustainable public offering in 2017. JSMR will allocate the obtained funds to cover the refinancing and cost reduction. Actually, JSMR is planning to launch a worth of Rp 19 trillion of sustainable public offering. However, JSMR needs to reduce the target of sustainable public offering. “From Rp 6 trillion along 2017 to the minimum of Rp 4 trillion,” Anggiasari said.

In 2017, JSMR will be pursuing larger capital expenditures, or doubled from Rp 10 trillion in 2016. During the same period, the toll road revenues are predicted to grow by 16% on year on year (YoY) basis.

JSMR will take contractor refinancing scheme as investment instrument in the next year. The company will also avoid the cash loans and cash investment.

“We fill focus on collecting funds in 2017 and improving the financial balance. Therefore, in 2019 we can acquire assets with a value up to Rp 113 trillion,” Anggiasari said.

JSMR has ambition to control the concession rights of a length of 2,000 kilometer (km) toll roads by 2019. To date, the issuer has just controlled 1,261 km toll road. JSMR also expects to operate as long as 1,261 km toll roads in 2019 by increasing the assets from Rp 55 trillion to Rp 113 trillion.

Analyst at Binaartha Parama Sekuritas Reza Priyambada estimates that the sales of the toll roads will lead to efficiency in JSMR performance in some aspects, such as operational costs.

Meanwhile, Analyst at BNI Securities Maxi Liesyaputra said, some corporate actions, such as rights issue will boost JSMR revenues in 2017. The rights issue funds will be allocated to settle some toll road projects, such as Semarang-Batang, Jakarta-Cikampek II, and Pandaan-Malang lanes.

Reza recommends ‘hold’ for JSMR with a target price of Rp 4,600 per a share. Meanwhile, Maxi recommends ‘buy’ with a target price of Rp 6,400 per a share. The price of JSMR shares dropped by 1.77% to Rp 4,430 per a share on Monday (19/12). (Muhammad Farid/Translator)