Debt of Five Property Companies Rises in First Half

The highest climb of debt was recorded by PT Ciputra Surya Tbk, with debt of Rp 194.5 billion in the first half of 2011 JAKARTA– The total debt from five property companies with assets from Rp 2 trillion (US$ 228 million) to Rp 5 trillion (US$ 570 million) rose to Rp 200.8 billion in the first half of 2011, according to IFT Research Department.
The highest climb of debt was recorded by PT Ciputra Surya Tbk (CTRS), with debt of Rp 194.5 billion in the first half of 2011. The higher debt was caused by increasing loan from PT Bank Mega Tbk (MEGA), from Rp 148.1 billion to Rp 369.7 billion. The loan was obtained by Ciputra’s subsidiary, PT Win Win Realty Centre, for the development of Ciputra World phase I.
PT Intiland Development Tbk (DILD) also booked more liabilities. Its debt rose Rp 108.4 billion to Rp 290.3 billion in the first half of 2011 was due to loan from PT Bank Bukopin Tbk (BBKP), which increased from Rp 128.9 billion to Rp 203.9 billion. The loan is used as working capital loan and investment.
Archied Notopradono, Director of Intiland Development, said that the bank loan will be used to finance long term projects such as superblocks.
This year, the company is planning to develop several superblocks and midscale residential areas such as Graha Natura Surabaya, mixed use project in Cengkareng, 1Park apartment, and expand Whiz Hotel development. Intiland is also exploring the possibilities of loan from PT Bank Central Asia Tbk (BBCA).
“Of the total requirement of Rp 1 trillion for the company’s capital expenditure (capex) in 2011, Rp 500 billion will be from internal capital. The remaining will be from bank loan,” he said.
There are also several companies that have reduced their debt. Debt of PT Pakuwon Jati Tbk (PWON) declined to Rp 1.36 trillion in the first half of 2011. Debts that were significantly reduced were bonds in senior secured notes and notes in 2015.
Senior secured notes that was issued was valued at Rp 110 billion, and was issued by its subsidiary. This was conducted to pay off some of the company’s debt and to acquire shares of PT Artisan Wahyu, the previous owner of Gandaria project.
Herman Subianto, Head of Corporate Finance at Pakuwon Jati, said that the decline of Pakuwon Jati debt was from payment of mature debts. “There are several debts that have and will be mature, including a bond that will mature in November 2011,” he said on Friday.
Debt of PT Alam Sutera Tbk (ASRI) went down around Rp 65.8 billion due to declining debt from PT Bank Mutiara Tbk (BCIC) and PT Bank Central Asia Tbk (BBCA). Debt from the two banks was to strengthen the company’s working capital.
Ability to Repay Loan
Although there is a rise of debt, the companies’ ability to pay off loan interest is still strong, and is supported by rising revenue. Interest coverage ratio from Ciputra Surya increased from 26 to 78 due to significant operating profit rise. PT Sentul City Tbk (BKSL) also generated high interest coverage ratio, despite higher debt.