PEFINDO has lowered the rating of PT Adhi Karya (Persero) Tbk (ADHI) to idBB with CreditWatch with Negative Implications from previously idA- with Negative Outlook

(July 31, 2026)--PEFINDO has also lowered the ratings of ADHI’s outstanding shelf-registered (SR) Bond III and SR Bond IV to idBB. The rating actions reflect ADHI’s stated intention to seek bondholders’ approval at the upcoming bondholders’ meeting (RUPO) to defer coupon payments on its outstanding bonds, in which the nearest coupon payment will be due on August 24, 2026. In our view, this proposal indicates that the Company is experiencing acute liquidity stress, which has materially weakened its capacity to fulfil financial obligations in a timely manner. The liquidity pressure primarily stems from persistently weak operating cash flow generation amid constrained financial flexibility, including access to funding, and the prolonged challenging conditions in Indonesia's construction sector.

The rating reflects ADHI’s satisfactory market position. The rating is constrained by the Company’s heightened liquidity risk amid weak financial flexibility, high leverage, execution risks associated with its order book, and a volatile business environment.

We may revisit ADHI’s rating and outlook following the resolution of the RUPO. Bondholders’ approval may trigger a rating downgrade, as under PEFINDO’s rating methodology, this amendment would be regarded as a distressed debt restructuring undertaken to avoid a payment default. The rating may be lowered further if the Company fails to resolve its RUPO proposal, as this would significantly increase the risk that ADHI will fail to make its coupon payments in the near term.

Established in 1960, ADHI is a state-owned contractor company primarily engaged in providing construction services. Its business is classified into four main segments: construction, engineering, procurement, and construction (EPC), property and realty, and investment infrastructure. As of June 30, 2026, PT Danantara Aset Management (Persero) holds 64.3% of ADHI’s shares, and the public owns the remainder. (ends)