Wijaya Karya Tbk (WIKA) is targeting rights issue of IDR 6.15 trillion to fund the surge in infrastructure projects contract. Until September 2016, the contract surges more than 3 times to IDR 67.07 trillion compared to the previous contract of IDR 11.47 trillion.
The contract is from carry over contract 2015 of IDR 29.08 trillion, new contract of IDR 13.79 trillion, Jakarta-Bandung MRT construction, the toll road of Balikpapan-Samarinda and Manado-Bitung of IDR 22.7 trillion, and other projects of IDR 1.5 trillion.
Bintang Perbowo, the President Director of WIKA, said that the right issue reached IDR 4 trillion from the government and IDR 2.15 trillion from the public. “The additional income will raise its financial ability to do various infrastructure project and improve its competitiveness so its performance will be stronger,” said Bintang.
Privatization Commission has agreed that the right issue costs IDR 1.525-2.505 per share by the end of October 2016. The fund will be used especially for constructing strategic projects that have been the government priority, like Soreang-Pasir Koja toll road, Manado-Bitung toll road, Balikpapan-Samarinda toll road, Thermal Power Station of Banten 2×1.000 MW, Thermal Power Station of Aceh 2×200 MW, Water Treatment Plant (WTP) of Jatiluhur 5.000 l/second, and Kuala Tanjung Industrial Area.
Danareksa Sekuritas recommended BUY for WIKA with a target price of IDR 4.300. (*)
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