Jasa Marga holds equity fundraising for Trans Java Toll Road
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Jasa Marga Galang Equity Fundraising Tol Trans Jawa
28 October 2022
PT Jasa Marga (Persero) Tbk (JSMR) through its subsidiary, PT Jasamarga Transjawa Tol (JTT) is planning to hold equity fundraising in the first half of 2023. PT JTT operates toll roads with a total span of 676 km or making up 57% of the total length of Trans Java Toll Road which is 1,184 km long.
President Director of Jasa Marga, Subakti Syukur explains that the equity fundraising program is one of the company’s strategic initiatives that has been prepared since 2020 and is set out in the company’s long-term plan. This corporate action aims to strengthen the financial fundamentals and sustainability of the company going forward.
“This strategic initiative is carried out since the prospect of rise in traffic and economic growth as well as road network along the corridor of Trans Java Toll Road is excellent in the long run,” said Subakti in his statement, Thursday (27/10/2022).
According to him, the toll road’s location on the most populous island in Indonesia, connected to strategic areas ranging from airports, ports, industrial estates, to tourist destinations, has indirectly driven the economy in Java.
In the same vein, Business Director of Jasa Marga, Reza Febriano remarks that Jasa Marga is optimistic that the follow-up to the company’s plan to hold equity fundraising through PT JTT will be smooth sailing. With a bright growth prospect, Trans Java Toll Road is expected to provide significant value added for all stakeholders.
Finance and Risk Management Director of Jasa Marga, Ade Wahyu explains that at the moment, the company is making preparations for the equity fundraising program that is planned to be executed in the first half of 2023. “It is necessary to introduce it to the public and prospective investors such as investment management institutions, pension funds, and toll road operators. We are optimistic that this product is great and will be warmly welcomed by the market,” Ade added.
Second Deputy SOE Minister, Kartika Wirjoatmodjo once stated that equity fundraising is a financial innovation that can provide some room for Jasa Marga to keep growing and maintain its positive performance going forward. JSMR has previously spun off its Jasamarga Transjawa Tollroad Regional Division to PT JTT in the hope to further optimise the operation of Trans Java Toll Road and make it more effective and efficient which, in turn, will result in positive impacts to toll road users.
CGS CIMB Sekuritas analysts, Bob Setiadi and Genie Purnamasari in their latest research predict that JSMR will be able to post 16% EBITDA CAGR in 2019-2024, thanks to the recovering traffic of improved mobility, new toll road operations, and stock buybacks from four toll road segments. The divestment plan of Jasamarga Transjawa Tol (JTT) is an overhang in the short run, but it can yield a positive EPS as long as JSMR has a valuation of above 2.5x PBV.
