Polysindo gets BB-minus

Polysindo gets BB-minus

SYDNEY (Reuter): Standard & Poor's Corp said it had placed its BB-minus corporate credit rating of Indonesian textile firm PT Polysindo Eka Perkasa on creditwatch with positive implications.

The credit ratings agency said it had also placed the BB-minus rating assigned to Polysindo's US$125 million 2001 global notes on creditwatch with developing implications.

S&P said Polysindo was close to completing the first stage of a major upgrade to its petrochemical production capability which would provide manufacturing capacity for purified terephthalic acid (PTA, the major raw material in polyester).

This would substantially increase production of polymer and polyester chip feedstock for the company's expanded, staple- fiber, production facilities, S&P said in a news release.

"The BB-minus rating assigned to Polysindo reflects the positive integration of the company's petrochemical production facilities with its well-established position in the polyester fiber sector and efficient production close to the high-growth southeast Asian markets," S&P said.

The establishment of petrochemical production gave Polysindo greater control over the cost and quality for its major textile raw material inputs, and was expected to lead to enhanced earnings by retaining the PTA profit margin, S&P added.

Polysindo is the largest textile producer in Indonesia.