S&P lowers ratings of 11 RI companies

S&P lowers ratings of 11 RI companies

MELBOURNE (Reuters): Standard & Poor's Corp said yesterday that it had cut the credit ratings of 11 Indonesian corporates, with all ratings on creditwatch with negative implications.

The 11 companies are Asia Pulp and Paper Co Ltd, Barito Pacific Timber, Citra Marga Nusaphala Persada, Daya Guna Samudera, Hanjaya Mandala Sampoerna, Indah Kiat Pulp and Paper Corp, Inti Indorayon Utama, Lontar Papyrus Pulp and Paper Industry, Pabrik Kertas Tjiwi Kimia, Pindo Deli Pulp and Paper Mills, Riau Andalan Pulp and Paper.

"The rating changes reflect Indonesia's deepening political crisis and civil unrest, which exacerbate operating risks facing business in that country," S&P said.

"The ability of companies to meet coupon and maturity obligations in a timely manner has deteriorated, and may become more difficult as business operations are subject to an increasingly volatile operating environment, that could result in a plant closure and sabotage.

"Further, paralysis in the banking system could cause a collapse in payment transactions," S&P said.

Those companies now on CCC+/WatchNeg/- are Asia Pulp and Paper, Indah Kiat, Lontar Papyrus, Pabrik Kertas, and Pindo Deli.

Those on CCC/WatchNeg/- are Inti Indorayon, Riau Andalan and Daya Guna, and those on CCC-/WatchNeg/- are Barito Pacific, Hanjaya Mandala, Citra Marga.

With the exception of Inti Indorayon and Riau Andalan which had been rated CCC-plus and on developing watch, the other companies had been rated B-minus on negative watch.