Adhi Karya to up stake in derailed monorail project
State-owned construction firm PT Adhi Karya announced Wednesday it would spend Rp 225.9 billion (US$25.4 million) so as to increase its stake in PT Jakarta Monorail (JM), the consortium given the contract to develop the long-delayed Jakarta monorail system.
All of the money will come from the publicly listed firm's own reserves, the company's board of directors said in a statement. The firm already owns a direct 7.65 percent stake in JM, and the planned investment will increase its interest to 18.68 percent.
In addition, Adhi Karya indirectly owns more of JM through PT Indonesia Transit Central (ITC), which is 24.67 percent owned by Adhi Karya.
ITC is the majority shareholder in JM.
Adhi Karya said that by increasing its stake, it hoped to be able to increase its capital contribution for the financing of the monorail project.
The project has been on again, off again for most of the past year, mainly because of financing problems and quarrels over a state guarantee.
A consortium of Middle East investors led by the Dubai Islamic Bank had said it would invest up to $650 million in the project provided that the central government guaranteed its investment.
After months of uncertainty, JM finally received the guarantee in April from the Finance Ministry, stating that the government would make good any losses suffered by JM should the number of its passengers fall below 160,000 per day.
Following the issuance of the guarantee, JM claimed that the Dubai Islamic Investment Bank was prepared to go head. Now, JM says it is also seeking funds from local banks so as to help reduce exposure to overseas dollar loans.
JM is currently negotiating with a number of local banks, including Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank DKI, a bank owned by the Jakarta provincial government.
The planned project consists of two lines: the 14.3 km green line and the 13.5 km blue line.
The green line will run through South Jakarta's Kuningan business district, along Jl. Sudirman to Tanah Abang in Central Jakarta, while the blue line will link Kampung Melayu in East Jakarta with Roxy in West Jakarta. (04)
All of the money will come from the publicly listed firm's own reserves, the company's board of directors said in a statement. The firm already owns a direct 7.65 percent stake in JM, and the planned investment will increase its interest to 18.68 percent.
In addition, Adhi Karya indirectly owns more of JM through PT Indonesia Transit Central (ITC), which is 24.67 percent owned by Adhi Karya.
ITC is the majority shareholder in JM.
Adhi Karya said that by increasing its stake, it hoped to be able to increase its capital contribution for the financing of the monorail project.
The project has been on again, off again for most of the past year, mainly because of financing problems and quarrels over a state guarantee.
A consortium of Middle East investors led by the Dubai Islamic Bank had said it would invest up to $650 million in the project provided that the central government guaranteed its investment.
After months of uncertainty, JM finally received the guarantee in April from the Finance Ministry, stating that the government would make good any losses suffered by JM should the number of its passengers fall below 160,000 per day.
Following the issuance of the guarantee, JM claimed that the Dubai Islamic Investment Bank was prepared to go head. Now, JM says it is also seeking funds from local banks so as to help reduce exposure to overseas dollar loans.
JM is currently negotiating with a number of local banks, including Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank DKI, a bank owned by the Jakarta provincial government.
The planned project consists of two lines: the 14.3 km green line and the 13.5 km blue line.
The green line will run through South Jakarta's Kuningan business district, along Jl. Sudirman to Tanah Abang in Central Jakarta, while the blue line will link Kampung Melayu in East Jakarta with Roxy in West Jakarta. (04)