Jasa Marga KIK-EBA’s Demand Reaching Twice from its Target
Jasa Marga, Tbk (JSMR IJ), a state-owned toll road operator, issued an asset-backed collective investment contract (KIK-EBA) on Thursday (30/08). This KIK-EBA’s issuance incoming bids reached IDR5.1trn, 2.5 times from its target IDR2trn (USD150mn), may be able to push down company’s cost of funding below bank interest. Under this KIK-EBA’s 5y tenors, Jasa Marga will borrow funds from investors and will pay them back with the Jagorawi Toll Road revenue. The contract will allow the company to get more cash for its projects, including the Jakarta-Bandung fast train and sections of the Trans Java Toll Road. For the record, the company needs IDR18trn to meet its capital expenditure needs this year.
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For the record, the company needing nine months to clear all necessary paperwork for the contract, due to backlog at the tax office, which took months to produce a confirmation letter that. This KIK-EBA’s funding scheme, is the first of its kind, backed by toll road revenue, and paving the way for alternative financing for the government’s infrastructure projects. Jasa Marga is in the best position for infra boom in the future, with the potential implementation of the land bill. The company is also best defensive play given inflation-hedge tariff adjustment and a pure domestic business. Resilient traffic, future expansion, better cost management through automation and strong positioning remain the company’s key success factors.
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