PEFINDO has affirmed its idA+ rating for PT Barito Pacific Tbk with a stable outlook

PEFINDO has affirmed its idA+ rating for PT Barito Pacific Tbk (BRPT) with a stable outlook. We have also affirmed idA+ ratings for BRPT’s Shelf Registered (SR) Bonds I, SR Bonds II, and SR Bonds III, including its plan to issue SR Bonds III Phase II of IDR1.0 trillion in the fourth quarter of 2023 for refinancing purpose.

The rating reflects the solid market position of BRPT’s major operating segments in the petrochemical business through PT Chandra Asri Petrochemical Tbk (TPIA) and the renewable energy through PT Barito Renewable Energy Tbk (BREN), expected stable dividend distribution from these major subsidiaries, and the stable revenue stream from the energy segment. However, the rating is constrained by its moderate cash flow protection measures, indirect access to the cash flow of its operating subsidiaries, and the inherent risks related to its key operating segments.

The rating may be raised if BRPT’s performance improves as reflected in a sustained improvement in the financial profile, particularly its cash flow protection measures resulting from deleveraging efforts and higher cash flow generation from subsidiaries. However, the rating may be lowered if there is a persistent deterioration in its financial profile due to a narrowing spread in the petrochemical business or higher debt than projected without being compensated for by stronger cash flow generation. The rating may also be under pressure in case of a deterioration in its cash flow stream from its subsidiaries, which may be triggered by lower earnings in the petrochemical sector, or a natural event severely worsening the geothermal segment. The rating has also not factored in the additional debt-funded capital expenditure for several projects under TPIA, as the final investment decisions have not yet been finalized.

Established in 1979, BRPT is an investment holding company ultimately owned by Prajogo Pangestu.

It currently operates in two major segments, petrochemical and renewable energy, through its controlling stakes in PT Chandra Asri Petrochemical Tbk and PT Barito Renewable Energy Tbk. As of September 30, 2023, its shareholders consisted of Prajogo Pangestu (71.16%), PT Barito Pacific Lumber (1.21%), PT Tunggal Setia Pratama (0.34%), treasury stock (0.20%), and others (27.09%). (ends)