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Jakarta, CNBC Indonesia – State-owned companies (BUMN), now under the leadership of Erick Thohir, have struggled to finance themselves through debt. It is true?
The Director of State Wealth of the Ministry of Finance, Isa Rachmatarwata, said that BUMN is beginning to have difficulties finding sources of financing from debt. This was transmitted by Isa when he was a speaker on the aspirations of the Employment Creation Law in the financial and investment sector, which was transmitted virtually.
“When we hand over to SOEs to make or seek their own financing, we know that many SOEs have begun to experience limitations in their ability to seek debt financing,” Isa said, explaining why the virtual SWF was formed, on Wednesday (12/2/2020).
Meanwhile, Indonesia still needs funding to support infrastructure development and other strategic projects that support the economy. Another challenge, the financing of these projects is usually long-term.
Meanwhile, he said, Indonesia’s long-term savings fund remains insufficient to meet financing needs for strategic and infrastructure projects.
“On the one hand, we need funds, while the existence of internal funds is not enough and the funds from abroad have not arrived,” he said.
Therefore, the Investment Management Institution (LPI) was formed. Subsequently, LPI will be responsible for raising funds, managing funds, organizing investments, and seeking investment partners, both domestic and foreign.
According to Isa, a breakthrough is needed to build a path for foreign investment partners to feel comfortable and ready to invest in Indonesia, both for infrastructure and other development needs that will be identified over time, “he said.
The Review Team for the Establishment of LPI in the Ministry of BUMN, Arif Budiman, agrees with this. According to him, the ability of various state-owned companies to attract debt is already maximum.
“As Pak Isa said, the term capacity for some BUMN friends has been maximized. Therefore, it is expected that with new investments, new funds, new investments can be made, both by the joint LPI fund and by the BUMN”, said.
In Isa’s presentation material, the debt to gross income and equity ratio of BUMN or debt to equity ratio (DER) of a series of BUMN is beginning to approach a reasonable limit. It should be noted that the fair limit for the DER itself is 3-4 times.
For example, the DER of a BUMN construction company exceeds and some are close to its reasonable limits. Including, PT Adhi Karya (Persero) Tbk up to 5.76 times, PT Waskita Karya (Persero) Tbk 3.42 times, PT PP propriedadi Tbk 2.90 times, PT Pembangunan Perumahan (Persero) Tbk 2.81 times and PT Wijaya Karya (Persero) 2.70 times .
Several other SOEs that exceeded and approached the normal DER limit, namely Krakatau Steel (Persero) Tbk at 6.05 times, PT Garuda Maintenance Facility AeroAsia Tbk at 4.83 times, PT Timah (Persero) Tbk 2.82 times and PT Jasa Marga (Persero) Tbk 3.26 times.
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