PEFINDO assigns “idAAA” rating for PT Perusahaan Gas Negara Tbk

(April 15, 2019)--PEFINDO has assigned its “idAAA” rating for PT Perusahaan Gas Negara Tbk (PGAS). The outlook for the corporate rating is “stable”. An obligor rated idAAA has the highest rating assigned by PEFINDO. The obligor’s capacity to meet its long-term financial commitments, relative to that of other Indonesian obligors, is superior.

The rating reflects PGAS’ important role to the Indonesian government, its very strong market position in domestic gas distribution supported by an extensive pipeline network in Sumatra and Java, and strong liquidity to support business expansion. The rating is constrained by exposure to the risks of macroeconomic growth and fluctuations in commodity prices.

The rating will be lowered if PGAS incurs substantially larger debt than projected, which could significantly weaken its capital structure and cash flow protection measures. The rating will also be under pressure if its important role to the government or the industry changes materially, or if there are macroeconomic and/or commodity price fluctuations, which would adversely affect its business performance.

PGAS is engaged in gas transmission and distribution in Indonesia. After the acquisition of 51% shares of PT Pertamina Gas (Pertagas) in December 2018 from PT Pertamina (Persero), which held 56.96% of PGAS’ shares as a result of the establishment of the state-owned energy holding company, PGAS became the largest company in the gas transmission and distribution sector. At the end of 2018, it had an integrated oil and gas business along with its subsidiaries in upstream oil and gas, gas infrastructure, gas processing, oil transportation, and downstream gas distribution and transporting. As of December 31, 2018, its shareholders were PT Pertamina (Persero) (56.96%) and the public (43.04%). (ends)