Jun 08 2012 |
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Bakrieland Development Tbk.
PEFINDO lowered its ratings on PT Bakrieland Development Tbk. (ELTY or the Company) and the Company's Bond I/2008 to "idBB+" from "idBBB". The rating of ELTY's Sukuk Ijarah I/2009 Serie B is also lowered to "idBB+(sy)" from "idBBB(sy)". The lower ratings were triggered by its weakening interest coverage ratio and tightening liquidity position. The ratings also reflect ELTY's aggressive financial leverage and the nature of property industry, which is sensitive to macroeconomic condition. The mitigating factors for the ratings include ELTY's strong business position as one of the country's largest property developers and its above average asset quality. PEFINDO puts ELTY's corporate rating on Creditwatch with negative implications to reflect our concern on its liquidity pressure. The weakening cash flow coverage is mainly driven by the underperforming toll road business segment, which was financed by a project-based loan amounting to IDR1.3 trillion from a bank syndication led by PT Bank Negara Indonesia (Persero) Tbk. and loan from Beleggingsmaatschappij Broem B.V. (one of the shareholders) of USD68.8 million at end of March 2012. The Company faces the liquidity pressure to repay the loan from Beleggingsmaatschappij which will fall due on October 7, 2012. ELTY is proposing to re-profile its syndicated bank loan and to extend the maturity of the shareholder's loan. The Company's rating will be further downgraded if the liquidity pressure could not be solved within three months.
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