Friday, February 23, 2024

Waskita’s delisting by Indonesia Stock Exchange might affect investors

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PT Indonesia Stock Exchange (BEI) recently announced PT Waskita Karya Tbk (WSKT) to be removed from the stock exchange or delisted which has a direct impact on investors.

Retail investors are haunted by uncertainty regarding Waskita shares due to the threat of delisting. Waskita’s debt crisis spread to insurance companies and pension funds which were its bond investors.

Meanwhile, the debt restructuring process requires time and agreement from the creditors. Meanwhile, the merger scheme with Hutama Karya can only be implemented after the debt restructuring is complete.

The Exchange sees that Waskita is currently having problems restructuring jumbo debt, experiencing conditions that significantly affect the continuity of the company’s business, both financially and legally. The Exchange assessed that the company could not show adequate indications of recovery.

The announcement from BEI is the first warning after Waskita shares were suspended for six months from May, with four warnings remaining until Waskita is actually issued until May 2025.

It is feared that investors will lose interest in investing in BUMN shares, such as Waskita, which has huge debt. After that, bond investments cannot be cut loss.

According to PT Kustodian Sentral Efek Indonesia (KSEI), insurance companies and pension funds are the largest investors in the ten bond series of Waskita Karya and its subsidiaries, with a total of IDR 8.94 trillion. Meanwhile, local investors have IDR 8.83 trillion in bonds, foreign investors IDR 106.65 billion.

Budi Tampubolon, Chairman of the Management Board of the Indonesian Life Insurance Association (AAJI) said that the case of failure to pay Waskita’s bonds which dragged down the company was inevitable. On the other hand, it was also not the fault of insurance companies and pension funds because Waskita at that time was still healthy with an investment grade rating.

On the other hand, Waskita’s long-term debt reached IDR 61.95 trillion, while the short-term debt that had to be repaid reached IDR 22.15 trillion. Meanwhile, Arya Sinulingga, Special Staff of the Ministry of BUMN, said that his party has solutions in the form of good assets but not all of them have been completed. Later, these assets can be sold to reduce debt.

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