S&P gives Pindo Deli Finance BB-rating<\/p>\n
JAKARTA (JP): Standard & Poor rating agency yesterday assigned
\nthe US$400 million guaranteed senior notes of Pindo Deli Finance
\nMauritus a BB- (minus) rating.<\/p>\n
Pindo Deli Finance Mauritus' senior notes will be issued in
\ntwo tranches due 2002 and 2007 by parent PT Pindo Deli Pulp and
\nPaper Mills.<\/p>\n
S&P also gave its "BB" corporate credit rating to Pindo Deli,
\nthe second-largest subsidiary in the Asia Pulp & Paper Co. Ltd.
\n(APP) group.<\/p>\n
The rating agency said the corporate credit rating outlook is
\nstable.<\/p>\n
It said the rating reflected Pindo Deli's solid position in
\nthe strongly growing Indonesian and regional Asian paper products
\nsector, vertical integration with 80 percent PT Lontar Papyrus
\nPulp & Industry, low-cost pulp and paper operations and a high
\nlevel of operational integration within the APP group.<\/p>\n
While the proceeds of the unsecured note issue would be used
\nto refinance a portion of Pindo Deli's existing secured debt
\nfacilities, secured debt would remain at about 18 percent of
\ntotal debt after refinancing, it said.<\/p>\n
Pindo Deli intended to further reduce secured debt in the
\nfuture through further unsecured debt issues, modest equity
\nissues and asset divestments, S&P said.<\/p>\n
If secured debt is reduced, the rating for the note issue
\ncould be equalized with that of the corporate credit rating, it
\nsaid.<\/p>\n
S&P said Pindo Deli was a significant operating entity in the
\nAPP group.<\/p>\n
Its subsidiary Lontar was able to produce 545,000 metric tons
\nof pulp per year to supply Pindo Deli, the APP group's commercial
\nand industrial paper converters and produce market pulp, it said.<\/p>\n
Lontar's pulpwood needs are met through an exclusive long-term
\nsupply contract with related company, PT Wirakarya Sakti, which
\nhas long-term forest concessions.<\/p>\n
Current installed paper-making capacity, comprising eight
\nsmall-to-medium scale machines, is about 217 tons per year.<\/p>\n
Two new paper machines will be operational by the end of the
\nyear, increasing capacity by 450,000 tons a year.<\/p>\n
Further tissue capacity of 120,000 tons per year is expected
\nto begin by the end of next year.<\/p>\n
APP, 86.5 percent owned by holding company for the Sinar Mas
\nGroup, has integrated operations in forestry management, pulp
\nmanufacture, fine paper and industrial paper manufacture and
\ndistribution.<\/p>\n
The group recently expanded its operations to India and China
\nand is committed to constructing a large pulp mill in Malaysia.
\n(das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sp-gives-pindo-deli-finance-bb-rating-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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