PEFINDO assigned idBBB- to PT Waskita Toll Road

(January 12, 2023)--PEFINDO assigned idBBB- to PT Waskita Toll Road (WTR). The outlook for the corporate rating is stable.

The rating reflects strong likelihood of support from its parent – PT Waskita Karya (Persero) Tbk (WSKT, idBBB/Stable) and good prospects from its toll road projects. However, the rating is constrained by its high dependence on asset divestment, aggressive capital structure, and weak cashflow protection.

The rating may be raised if WTR successfully executes its divestment as planned to maintain solid cash flow while improving its financial profile significantly on a sustained basis. However, the rating may be lowered if it fails to divest its toll road assets as planned and followed by incurring higher-than-expected debts, which may weaken its capital structure and cash flow protection. The rating may also come under pressure if it fails to complete the toll road construction of its majority-owned subsidiaries, which may further delay the cash inflow from the toll road revenue and divestment pipelines. The rating may also be lowered if we view a significant decline in the parent’s support and ownership.

Engaged in the toll road industry, WTR held shares in 10 toll road concessions as of September 30, 2022, with the shareholders consisting of WSKT (92.1%) and PT Taspen (Persero) (7.9%). (ends)