Indah Kiat's US$500m notes rated 'BB-'<\/p>\n
JAKARTA (JP): International rating agency Standard & Poor's
\nhas given a \"BB-\" rating to Indah Kiat Finance Mauritius Ltd's
\n$500 million guaranteed notes due 2007.<\/p>\n
Standard & Poor's also raised its rating on Indah Kiat
\nInternational Finance Co B.V.'s 37 billion Japanese yen (US$330
\nmillion) unsecured bonds due 2000 to \"BB-\" from \"B+\".<\/p>\n
The two companies are affiliates of publicly listed PT Indah
\nKiat Pulp & Paper Corp, known as Indah Kiat.<\/p>\n
Standard & Poor's has given a \"BB\" corporate credit rating to
\nIndah Kiat, which has a stable outlook.<\/p>\n
Parent Indah Kiat will unconditionally guarantee Indah Kiat
\nFinance Mauritius' $500 million notes on an unsecured basis.<\/p>\n
\"The rating reflects Indah Kiat's very competitive pulp
\noperations built on cheap fiber and labor resources,\" the rating
\nagency said Wednesday.<\/p>\n
Indah Kiat has four large, cheap pulp mills which supply its
\nown commercial and industrial paper converters and others within
\nits group.<\/p>\n
The company's pulpwood needs are met through an exclusive
\nlong-term supply contract with a related company, PT Arara Abadi,
\nwhich has long-term forest concessions.<\/p>\n
It has announced a US$1 billion rights issue, to be settled in
\nAugust. The proceeds are already committed to two new paper
\nmachines that can make 800,000 metric tons a year.<\/p>\n
Indah Kiat is 54.39 percent owned by PT Purinusa Ekapersada --
\na subsidiary of the Sinar Mas group owned by Eka Tjipta Widjaja
\n-- 19.99 percent by CHP International Corp of Taiwan, 8.54
\npercent by YFY Global Investment Corp of Taiwan and by public
\ninvestors.<\/p>\n
Indah Kiat is a significant operating entity in the Asia Pulp
\n& Paper Co Ltd (APP) group, an Indonesian forest product group
\nwith operations in India and China.<\/p>\n
APP is the 86.5 percent-owned holding company for the Sinar
\nMas group's forest product operations.<\/p>\n
\"While APP group's operating cash flow will continue to be
\npositive, internally generated funds are unlikely to be
\nsufficient to meet substantial and ongoing capital commitments,\"
\nStandard & Poor's said.<\/p>\n
It said that financial measures could improve in the longer
\nterm, but this would be constrained by the group's ambitious
\ngrowth plans and aggressive financing.<\/p>\n
The rating agency said forest product demand should remain
\nfavorable globally in the medium term.<\/p>\n
It predicted that forest product pricing would continue to
\ncycle from the current low levels to modestly higher prices in
\nthe next year or so. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indah-kiats-us500m-notes-rated-bb-1447893297",
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