Adhi Karya to speed up bonds issuance, enlarge bonds size amid tax amnesty

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Photo by PT Adhi Karya Tbk

JAKARTA (TheInsiderStories) – State-owned construction firm PT Adhi Karya Tbk (IDX:ADHI) is set to fast forward the planned bond issuance and enlarge the bonds size target, taking advantage of the implementation of tax amnesty law this year.

The company plans to move the issuance schedule to this year from initial plan next year and increases the target to Rp 5.5 trillion from only Rp 2.5 trillion.

“We’re going to move the bonds issuance forward from initial plan [to be carried out] in May or June 2017,” Adhi Karya Finance Director Harris Gunawan was quoted by Kontan as saying.



The company would issue the bonds before the end of tax amnesty period in March 2017 with expectation that the obligation coupon rate would be lower than the bank loan interest, he went on.

Adhi Karya plans to use Rp 2.5 trillion from the Rp 5.5 trillion-target for its capital expenditure (capex) and matured-bonds refinancing, as well as another Rp 3 trillion for its light rail transit (LRT) project.

Under the administration of President Joko “Jokowi” Widodo, the government has successfully obtained green light from the House of Representatives (DPR) to go on with its tax amnesty plan to help bring back “Indonesians’ money” from offshore.

The government has set a target to reap Rp 165 trillion from the tax amnesty, which is set to be performed until March next year.



Adhi’s Harris said that issuing bonds was a good decision for Adhi as the repatriated funds from tax amnesty would be directed to infrastructure projects.

The company booked only Rp 6.1 trillion in new contracts in the first half of this year, or only 24.4 percent of its target from new contracts this year. (*)

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Source: The Insiderstories
Adhi Karya to speed up bonds issuance, enlarge bonds size amid tax amnesty

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