Polysindo's debt ratings upgraded<\/p>\n
JAKARTA (JP): Moody's Investors Service upgraded its rating on
\ntwo guaranteed secured notes of Polysindo International Finance
\nCompany B.V. to Ba2 from Ba3 and its rating on the US$2.5 million
\nsenior notes of PT Polysindo Eka Perkasa to B1 from B2.<\/p>\n
Moody's said in a statement here yesterday that the two notes
\nof Polysindo Finance were $125 million guaranteed secured notes
\ndue in 2001 with an interest rate of 13 percent a year, and $260
\nmillion notes with an interest rate of 11.4 percent due in 2006.<\/p>\n
It also assigned a Ba2 rating to the proposed issuance of $200
\nmillion guaranteed secured note of Polysindo Finance, a wholly-
\nowned subsidiary of Polysindo Eka Perkasa, a unit of the Texmaco
\nGroup.<\/p>\n
According to the statement, the rating actions recognized the
\nsuccessful completion of the new expansion plan by Polysindo Eka
\nPerkasa, a vertically integrated chemical and textile
\nmanufacturer headquartered in Jakarta.<\/p>\n
The company has now a greater emphasis on polyester fibers
\nthrough the significant expansion of its existing polyster chip,
\nfiber, weaving and finishing production capacity, the rating
\nagency said.<\/p>\n
Polysindo Eka Perkasa recently announced a new $800 million
\nfive-year expansion plan that would increase capacity to support
\nits downstream production of yarn, fiber, and fabrics.<\/p>\n
Moody's said that Polysindo's vertical integration strategy,
\ncombined with its flexible low-cost production facilities, and a
\nlow labor cost situation in Indonesia should enable the company
\nto successfully compete in the export markets and sustain some
\ncost advantages against Asian producers.<\/p>\n
It said that the polyster fiber growth in Asia was mainly
\ndriven by the increasing polyester share of synthetic fibers, low
\nper capita polyster textile consumption in Southeast Asia
\ncompared with Japan and the U.S., rationalization of the industry
\nin Europe, and uncertainties in global cotton cultivation.<\/p>\n
Currently, the industry is under pricing pressure, mainly
\ndriven by capacity growth in India, Indonesia, and South Korea.<\/p>\n
According to Moody's, polyester fiber prices are close to the
\nbottom of the cycle. (bnt)<\/p>",
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