www.pefindo.com - PEFINDO lowered its ratings on PT Bakrieland Development Tbk. (ELTY or the Company) and the Company’s Bond I/2008 to “idBBB” from “idBBB+”. PEFINDO also lowered the rating of the Company’s Sukuk Ijarah I/2009 Serie B to “idBBB(sy)” from “idBBB+(sy)”.
The downgrade was attributable to the Company’s weakening cash flow protection ratios. In 2011, the Company’s EBITDA to debt ratio and EBITDA to interest (including capitalized interest) ratio were 0.1x and 0.9x, respectively. (source)
The outlook for ELTY’s corporate rating is “negative” to anticipate its continuing weak cash flow protection ratios if the planned divestment of toll road business could not be realized in the near term. The outlook will be revised to stable if ELTY could realize the divestment and its cash flow protection ratios show an improving trend. However, the Company will not have any difficulties to pay its Sukuk Ijarah I/2009 Serie B amounting to IDR90 billion that will mature on July 7, 2012. ELTY plans to repay the maturing Sukuk with its internal cash flow. The Company’s cash balance as of Dec. 31, 2011 was IDR597.1 billion.
ELTY is Bakrie Group’s arm in property business. The Company’s businesses are basically divided into four main areas: 1) City Property-has been developing Rasuna Epicentrum, a superblock in Kuningan, Jakarta, and Sentra Timur Residence apartment in East Jakarta; 2) Landed residential-has been developing several housing projects in Bogor, Malang, Batam, and Jonggol; 3) Hotel and Resort-runs a number of hotels in Bali, Bogor, Balikpapan, Lido and Lampung; and 4) Property related infrastructure such as toll road projects and water utility business. As of December 31, 2011, ELTY’s shareholders were Avenue Capital (12.16%), Daiwa Capital Market (5.89%), Asuransi Jiwa Sinarmas (5.02%), and public (76.93%). Bakrie Group has around 30% of the Company’s shares through several names.
Rating Period: April 4, 2012 – June 1, 2012
Rating Period for Sukuk Ijarah I/2009 Serie B: April 4, 2012 – July 7, 2012
Contact Analyst: Vonny Widjaja & Rachmadi Kurniawan
Source: http://new.pefindo.com/r_releasedetail.php?cid=1037 - April 5, 2012
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