JSN And JNKK Divestment Details - RHB
BUY, IDR2,700 DCF-based TP implies 75% upside and 4% yield, and 10x9.8x FY19F-20F P/Es. WSKT’s divestment of 40% of JSN and JNKK will likely be completed in 4Q19. Its stakes are valued at c.IDR2.8trn (1.72x P/BV, as of 30 Jun). Our calculation suggests it will book a c.IDR1.2trn gain – higher than our initial estimate. This divestment should strengthen its cash position and ease financing of working capital for future toll road projects. The next divestment are for the Kanci-Pejagan-Pemalang, and Pasuruan-Probolinggo toll roads.
Solo-Ngawi and Ngawi-Kertosono toll road divestment. Waskita Karya expects the divestment of its 40% stakes in Jasamarga Solo Ngawi (JSN) and Jasamarga Ngawi Kertosono Kediri (JNKK) to be completed in 4Q19. Road King Infrastructure Group and Waskita Toll Road (WSKT’s subsidiary) have signed a conditional sale and purchase agreement (CSPA) for the latter’s 40% stakes in JSN and JNKK. Conditions in the CSPA include a bank guarantee from the buyer for payment, an agreement in the event of a dispute/legal case due to the actions of the soon-to-be former shareholder. JSN and JNKK manage the 90.4km Solo-Ngawi and 87km Ngawi-Kertosono toll roads. Both toll roads, which were fully operational in 2018, are part of the Trans Java Toll Road.
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