PT Waskita Karya Tbk (WSKT), a state-owned construction company, announced its inability to repay the principal of its Series A Obligasi III Tahun 2021 bonds, amounting to Rp722 billion ($46.5 million), which matured on September 24, 2026. This default has triggered a claim on the state guarantee provided for these bonds, with the Trustee already submitting the claim to the Guarantor, and the process is currently underway.
While Waskita was unable to meet its principal repayment obligation, it had set aside Rp28.8775 billion ($1.86 million) for the interest payments on both Series A and Series B of the same bonds. This fund was reserved since August 20, 2026, and Waskita had issued a standing instruction to Bank Mega, the Trustee, on September 15, 2026, to transfer the interest payment to PT Kustodian Sentral Efek Indonesia (KSEI) on September 23, 2026.
The company acknowledged that any penalties or additional costs resulting from the delayed principal payment would be its responsibility, to be calculated according to the terms of the trust agreement. Despite this significant default, Waskita's company secretary, Steven Subianto, stated that the event is not expected to have a material impact on its operational activities, legal standing, financial condition, or business continuity.
This event highlights the increasing scrutiny on contingent liabilities from Indonesian state-owned enterprises (SOEs), especially as Waskita's shares remain suspended from trading on the Indonesia Stock Exchange (IDX) due to ongoing debt restructuring efforts. Waskita has been working to reduce its total liabilities, cutting them from around Rp84 trillion ($4.95 billion) in 2023 to Rp67.1 trillion ($3.95 billion), or Rp66.5 trillion ($4.28 billion) by the end of last year, a 21% reduction. The current default is for a non-government guaranteed bond, and the broader restructuring for approximately 75% of its bonds involves maturity extensions until December 2034, with one series still awaiting bondholder approval.
Economists, such as Yusuf Rendy Manilet of CORE Indonesia, emphasize that while SOE debt is separate from sovereign debt, such defaults raise questions about fiscal resilience and potential government intervention. Investor confidence relies not just on official fiscal indicators but also on transparent management of contingent liabilities, especially given the narrowing fiscal space and potential implications for Indonesia's sovereign credit profile and overall investment climate. Failure to resolve such issues could lead to delisting from the IDX for prolonged trading suspensions.
