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November 20, 2007 |
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SUMBER SEGARA: S&P Assigns 'B-' Corporate Credit Rating Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Indonesia's PT Sumber Segara Primadaya. The outlook is stable. At the same time, Standard & Poor's assigned its 'B-' rating to the proposed US$300 million senior unsecured bond due in 2012 to be issued by S2P Power B.V., a wholly owned subsidiary incorporated in The Netherlands, established solely for the purpose of issuing this debt instrument. The bond will be irrevocably and unconditionally guaranteed by S2P. The ratings are subject to final documentation. "The ratings on S2P reflect the company's very limited track record of operations, relatively weak contractual structure, single counterparty exposure to PT Perusahaan Listrik Negara (Persero), and regulatory environment uncertainties in Indonesia," said Standard & Poor's credit analyst Joey Chew. "These weaknesses are partly offset by the supportive relationship S2P has with PLN, offtake security, low project completion risk, and favorable demand outlook for electricity in Indonesia." Indonesia-based S2P is a coal-fired steam power plant with an installed capacity of 600 MW providing electricity to its sole offtaker and approximately 49% shareholder, PLN, for the Jawa- Bali power grid in southern Java. For the half year to June 30, 2007, S2P reported revenues of IDR728 billion with EBITDA of about IDR325 billion. The bond proceeds will be used primarily to refinance existing bank borrowings and shareholders' loans, fund additional working capital requirements, plant improvements, proposed bond coupon reserves, equity investment in a new power plant, and financing fees. "Standard & Poor's expects S2P to achieve operational stability within the targeted parameters and maintain adequate liquidity in the short to medium term," Ms. Chew added. "Potential upside to the ratings is limited until a track record of operational stability and acceptable liquidity is established. Conversely, significant deviations from expected operating performance, shareholder-friendly actions, or major debt-funded expansion plans, leading to further deterioration of the company's liquidity and financial profile, may negatively impact the ratings or outlook." About PT Sumber Segara Primadaya Headquartered in Jakarta, Indonesia, PT Sumber Segara Primadaya -- http://www.sumbersegaraprimadaya.com/ -- is an independent power producer. |
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