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January 22, 2008 |
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BERLIAN LAJU: S&P Says Rating Remains on CreditWatch Negative Standard & Poor's Ratings Services said PT Berlian Laju Tanker Tbk's corporate credit rating remains on CreditWatch with negative implications. The 'B+' issue rating on the US$400 million senior unsecured notes due 2014 and the US$125 million five-year convertible bonds due 2012, issued by BLT's fully owned BLT Finance B.V., also remains on CreditWatch with negative implications. These ratings were placed on CreditWatch on Oct. 15, 2007, after BLT's announcement that it had agreed to acquire Chembulk Tankers LLC, a U.S. chemical tanker company, and remain on CreditWatch pending the finalization of BLT's long-term financing plan. "Our 'B+' rating takes into consideration benefits derived in BLT's business profile from the entry into new market segments and an improved fleet profile, under an overall softening outlook for shipping companies," said Standard & Poor's credit analyst Manuel Guerena. The total consideration for Chembulk will be US$850 million, to be funded primarily by new debt; this funding plan increases BLT's US$856 million debt as of September 2007 well above 5x debt to EBITDA. In Standard & Poor's view, further downward pressure on the rating remains. "In resolving the CreditWatch, we will review the terms of the different funding phases and their execution, including the company's intention to partially reduce debt through an equity injection, as well as the potential subordination impact on the existing bonds if the financing changes the existing collateralization levels," Mr. Guerena said. BLT is an Indonesia-based shipping company, focusing on liquid bulk cargo, with operations primarily in Asia. Its other markets are the Middle East and Europe. In the first nine months of 2007, BLT recorded revenue amounting to USD294m, EBITDA of USD132m and net income of USD54m. The founder, Mr Hadi Surya has a 52.4% beneficial interest in BLT. |
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