Bakrie International gets BBB- rating

JAKARTA (JP): The Japan Bond Research Institute (JBRI) has assigned a BBB- rating to the foreign currency notes (euro notes) of Bakrie International Finance Company B.V to be issued under the Medium Term Notes Program.

JBRI has also assigned a BBB- rating to PT Bakrie and Brothers' rupiah notes to be issued under the same program.

The Japanese rating agency said yesterday the Triple B- rating reflected its diversified and stable cash flow derived from the company's solid operational base of three core businesses: telecommunications, infrastructure support and plantation.

Bakrie & Brothers expects the largest earnings contribution from its telecommunications sector, the company's most profitable core business with strong future prospects.

It engages in landline installations under revenue sharing programs with state-owned telecommunications company PT Telkom and the installation and operation of fixed wireless lines through a joint venture with PT Telkom.

Bakrie & Brothers also maintains a solid operational base in its infrastructure support division which boasts the largest domestic market share of welded pipes and seamless pipes for oil and gas industries, the rating agency said.

The agency added that Bakrie's rubber plantation business is internationally competitive. It conducts rubber trading through subsidiary Lewis & Peat which maintains a global trading market share of 11 percent.

The company's balance sheet is exposed to relatively large foreign exchange risk, mostly offset by currency hedging, it said.

PT Bakrie & Brothers was established in 1942 and was listed on the Jakarta Stock Exchange in 1989. It has three main core businesses: telecommunications, infrastructure support (mainly consisting of steel pipe manufacturing) and plantations.

About 44 percent of its shares are owned by Bakrie Investindo and 13.76 percent by the Bakrie family. (08)