 |
February 7, 2008 |
|
|
|
 |
BERAU COAL: Fitch Affirms 'B+' Long-Term Issuer Default Ratings Fitch Ratings has affirmed PT Berau Coal's 'B+' Long-term foreign and local currency Issuer Default Ratings, and 'A(idn)' National Long-term rating. The Outlooks for all ratings remain Stable. At the same time, Fitch affirmed the 'B+' senior unsecured rating of Berau's US$325 million senior notes due in 2011. The affirmation of Berau's ratings reflects its competitive coal mining costs, supported by long-term buyers with long-term contracts in place and near-term debt reduction plans to take advantage of the current high coal demand and price visibility. The ratings also consider its natural hedge on US$ borrowings arising out of around 80% revenues being denominated in US$. Meanwhile, Fitch notes that growth prospects for Berau remain robust, with increasing dependence on coal for power generation globally, and the relatively high coal price. At the same time, Berau's ratings are constrained by its relatively high financial leverage with an estimated net debt to annualised EBITDA ratio of 3.5x as at end September 2007. The ratings are also constrained by its exposure to commoditised coal price, high concentration risk -- with top 10 customers contributing nearly 90% of the first nine month of 2007 revenue, and reliance on contractors -- particularly its heavy dependence on one of its major contractors, PT Bukit Makmur Mandiri Utama, a privately held mining contractor. The Stable Outlook reflects Fitch's expectation that the de- leveraging will proceed as planned, aided by medium term price and order visibility. If Berau's leverage as measured by net debt/EBITDA ratio remains above 3.0x in 2008, a negative rating action may be taken. Conversely, a sustained net debt/EBITDA ratio below 2.5x may result in a positive rating action. Berau is Indonesia's fifth largest coal producer and operates under 30-years of Coal Contract of Work. It reported revenues and EBITDA of USD262m and USD56m respectively for the nine months ended September 2007. Rizal Risjad has a 70.4% beneficial interest in the company. |
|
|
||
|
Today's Top Stories have been selected from the Troubled Company Reporter - Asia Pacific. To receive the Full TCR-AP please CLICK HERE.
