Prospects Of Stabilization, Barito Pacific Gets An IdA+ Ranking From Pefindo
JAKARTA - PT Pemeringkat Efek Indonesia (Pefindo) has set an idA+ rating for the Barito Pacific Shelf-Registered Bonds III of a maximum of IDR 3 trillion. Bond issuance includes the issuance of the first phase of IDR 1 trillion which will be used to refinance debt.
"We have also reaffirmed the idA+ rating to PT Barito Pacific Tbk (BRPT) and Shelf-Registered Bonds I 2019-2020 and Shelf-Registered Bonds II 2021-2022. The prospects for the company's rating are stable," said Pefindo's statement, Tuesday, February 7.
The rating considers the weakening performance in the petrochemical business in the first half of 2022, due to higher raw material prices and weakening global demand for petrochemical products. Pefindo assessed that this was mitigated by strong liquidity and improved performance from the energy business.
The rating reflects the strong market position of the main operational segment of BRPT in the petrochemical business through PT Chandra Asri Petrochemical Tbk (TPIA) and the geothermal energy business through Star Energy Group Holdings (SEGH). In addition, there is also a good dividend distribution of primary subsidiaries, and a stable revenue flow from the geothermal energy segment.
"However, the rating is limited by moderate financial leverage, indirect access to the operational cash flow of subsidiaries, and risks inherent in the company's main operating segment, in our view," Pefindo continued.
The rating will be raised if BRPT's performance improves, as reflected in improving financial profiles in a sustainable manner, especially financial leverage as a result of efforts to reduce debt and the ability to generate higher cash flow than subsidiaries.
However, ratings will be lowered if there is a decrease in financial profile or cash flow from subsidiaries in a sustainable manner due to a narrowing gap in the petrochemical business, debt is greater than projected without being accompanied by the ability to produce stronger cash flow, and/or natural disasters that seriously exacerbate the geothermal segment.
The rating also does not take into account additional capital expenditures funded from debt for the construction of the second petrochemical complex under TPIA, as the final investment decision has not been finalized.
BRPT is an investment holding company owned by Prajogo Pangestu. Currently, the company, which was founded in 1979, operates in two main segments, petrochemicals and geothermal energy, through majority share ownership in PT Chandra Asri Petrochemical Tbk and Star Energy.
As of June 30, 2022, the Company's shareholders are Prajogo Pangestu (70.85 percent), PT Barito Pacific Lumber (1.20 percent), PT Tunggal Setia Pratama (0.34 percent), shares re-obtained (0.60 percent), and others (27.01 percent).