Media Release: Paiton closer to deal with PLN

Following is a press release from Standard & Poor's:

Paiton Energy Co., owner of a 1230 megawatt coal-fired plant in East Java, Indonesia, signed a binding term sheet in December with state-owned utility Perusahaan Listrik Negara (PLN) as a further step toward finalization of a renegotiated power purchase agreement.

This is part of a multiphase restructuring process, as the plant has been operating under an interim agreement since February 2000.

The rating on Paiton Energy Funding B.V.'s US$180 million senior secured bonds is 'CC', with a negative outlook.

As a new power purchase agreement would probably be a positive step toward financial rehabilitation for the project, Standard & Poor's will review the signed power purchase agreement, which should be finalized in March, as well as studying revised financial projections and operating conditions at the plant, in order to ascertain the project's credit profile under the new tariff regime.(*)

Contact: Erly Witoyo, Singapore (65) 239-6321

Thomas Doud, Singapore (65) 239-6303