Polysindo's debt ratings upgraded
Polysindo's debt ratings upgraded
JAKARTA (JP): Moody's Investors Service upgraded its rating on
two guaranteed secured notes of Polysindo International Finance
Company B.V. to Ba2 from Ba3 and its rating on the US$2.5 million
senior notes of PT Polysindo Eka Perkasa to B1 from B2.
Moody's said in a statement here yesterday that the two notes
of Polysindo Finance were $125 million guaranteed secured notes
due in 2001 with an interest rate of 13 percent a year, and $260
million notes with an interest rate of 11.4 percent due in 2006.
It also assigned a Ba2 rating to the proposed issuance of $200
million guaranteed secured note of Polysindo Finance, a wholly-
owned subsidiary of Polysindo Eka Perkasa, a unit of the Texmaco
Group.
According to the statement, the rating actions recognized the
successful completion of the new expansion plan by Polysindo Eka
Perkasa, a vertically integrated chemical and textile
manufacturer headquartered in Jakarta.
The company has now a greater emphasis on polyester fibers
through the significant expansion of its existing polyster chip,
fiber, weaving and finishing production capacity, the rating
agency said.
Polysindo Eka Perkasa recently announced a new $800 million
five-year expansion plan that would increase capacity to support
its downstream production of yarn, fiber, and fabrics.
Moody's said that Polysindo's vertical integration strategy,
combined with its flexible low-cost production facilities, and a
low labor cost situation in Indonesia should enable the company
to successfully compete in the export markets and sustain some
cost advantages against Asian producers.
It said that the polyster fiber growth in Asia was mainly
driven by the increasing polyester share of synthetic fibers, low
per capita polyster textile consumption in Southeast Asia
compared with Japan and the U.S., rationalization of the industry
in Europe, and uncertainties in global cotton cultivation.
Currently, the industry is under pricing pressure, mainly
driven by capacity growth in India, Indonesia, and South Korea.
According to Moody's, polyester fiber prices are close to the
bottom of the cycle. (bnt)