(May 9, 2025)--PEFINDO assigned its idBBB- rating with stable outlook to PT Trans-Pacific Petrochemical Indotama (TPPI). The corporate rating reflects TPPI’s benefits of synergy with the Pertamina group and good product diversification. The rating is constrained by a very weak financial profile and weak operating management.
The rating may be raised if TPPI exceeds its revenue and EBITDA targets, which is followed by improving its financial profile on a sustained basis, which may be supported by its new business scheme, which should improve utilization rate. The rating may be lowered if the Company incurs significantly higher debt without being compensated by an improved business profile. In addition, a markedly lower EBITDA than expected amid a high outstanding debt and continued sizeable working capital needs to be funded by debt, which may also trigger a rating downgrade. The rating can also be lowered if we find a lower degree of support from Pertamina from either the operational or financial side. The Company’s business transition to a semi-merchant model has been incorporated into our rating, although it has had a limited impact, as the strategy remains in its early stage.
TPPI is engaged in the petroleum refinery products industry, chemical industry and chemical goods and other special wholesale trading. The main products produced are aromatic products, especially paraxylene, benzene, ortho-xylene, heavy aromatic, and toluene. The Company also produces petroleum, especially light naphtha, gas oil, and fuels such as mogas 88 and mogas 92. As of December 31, 2024, its shareholders consisted of PT Pertamina (Persero) (38%), PT Tuban Petrochemical Industries (42%), Vitol B.V. (7%), and others (13%). (ends)
