Indonesian mobile network carrier Bakrie Telecom is looking to ink a refinancing loan to repay a Rp650bn (US$71.4m) bond, which matures in September 2012.
This is according to a Fitch Ratings release.
The bond was secured in August 2007, bearing an…
Indonesian mobile network carrier Bakrie Telecom is looking to ink a refinancing loan to repay a Rp650bn (US$71.4m) bond, which matures in September 2012.
This is according to a Fitch Ratings release.
The bond was secured in August 2007, bearing an annual interest rate of 11.9%.
In its most recent financial results, Bakrie said that as of 30 September 2011, about Rp648.3bn (US$71.2m) was still outstanding under that bond issue.
On 28 February, Fitch downgraded Bakrie Telecom’s long-term foreign- and local-currency issuer default ratings to ‘CCC’ from ‘B’.
The ratings agency argued that “the downgrade reflects the growing liquidity risks [Bakrie] faces with its Rp650bn bond maturing on 4 September 2012 and finance lease obligation payments of Rp660bn [US$72.5m] in 2012. Cash and equivalents were only Rp250bn [US$27.4m] at end-2011 and Fitch does not expect the company to generate sufficient cash to meet its obligations.”
It added that despite Bakrie trying to negotiate a refinancing loan, the company is likely to breach the financial covenants of its obligations because of its high leverage and poor trading results.