Debt Rating Cut, Adhi Karya (ADHI) at Risk of Default?

Jakarta - Rating agency PT Pemeringkat Efek Indonesia (Pefindo) has again downgraded the debt rating of state-owned construction company PT Adhi Karya (Persero) Tbk (ADHI). This time the rating fell from idBB to idB, with a CreditWatch Negative status still hanging over the company.

This is not the first downgrade. In the past five months alone, ADHI’s rating has been cut three times by Pefindo: from idA-/Negative in June 2026, to idBB/CreditWatch Negative in July 2026, and now to idB on 18 August 2026.

The company’s outstanding bonds, SR Bond III and SR Bond IV, were also dragged down to the same idB level.

The latest downgrade follows the outcome of the General Meeting of Bondholders for Sustainable Bonds III Series B and C. At that meeting, bondholders rejected ADHI’s request to defer coupon payments.

The nearest coupon maturity date is fast approaching, on 24 August 2026.

Pefindo cautioned that if ADHI is genuinely unable to pay the coupon due on that date, the situation could be considered an actual default and potentially trigger further rating downgrades.

“We may review the Company’s rating if ADHI can demonstrate sustainable capacity and resolution regarding financial obligations maturing in the near term,” Pefindo stated in its publication.

According to Pefindo, the rating reflects a number of risks weighing on ADHI simultaneously: high liquidity risk, weak financial flexibility, high leverage, project execution risk related to the order book, and a volatile construction business environment.

Based on unaudited reports as of June 2026:

• ADHI’s total assets fell significantly to Rp26.2 trillion, from Rp35 trillion at the end of 2024.

• Total debt stood at Rp8.3 trillion, with the debt-to-EBITDA ratio surging sharply to 7.7 times (annualised) - well above 5.1 times in 2024.

• The debt-to-equity ratio also jumped to 4.1 times, from just 0.9 times in 2024.

• The company posted a large net loss of Rp5.5 trillion throughout 2025, although in the first half of 2026 it managed to eke out a slim profit of Rp8.5 billion.

• The FFO to adjusted debt ratio remained negative at -5.6% for 2025 before improving to 4.2% (annualised) in the first half of 2026.