KCIC Transfers High-Speed Rail Debt Management to Danantara

Background on Debt Restructuring

PT Kereta Cepat Indonesia China (KCIC), the state-owned enterprise behind Indonesia's high-speed rail project, has officially transferred the responsibility for its debt restructuring to Danantara, a subsidiary of Danareksa. This move comes amid growing scrutiny over the project's financial management and debt repayment capabilities. KCIC's CEO, Dwiyana Slamet Riyadi, confirmed that the company will fully comply with Danantara's decisions regarding the restructuring mechanism and scheme.

Government Assurance on Debt Repayment

The decision follows a recent statement by Finance Minister Purbaya Yudhi Sadewa, who clarified that the debt repayment for the high-speed rail project will not be covered by the state budget (APBN). This assurance was crucial in maintaining market confidence while transferring the debt management to a specialized entity. Dwiyana met with Coordinating Minister for Economic Affairs Airlangga Hartarto to discuss technical matters related to the project, indicating government-level engagement in the restructuring process.

Implications for Project Financing

The transfer of debt restructuring to Danantara, a company with expertise in managing distressed assets, signals a strategic move to address the financial challenges associated with the high-speed rail project. As KCIC operates under Danantara's guidance, the restructuring process is expected to involve comprehensive financial analysis and potentially complex negotiations with creditors. This development is critical for stakeholders as it directly impacts the project's financial viability and future operations.