PEFINDO has affirmed its idCCC ratings to PT Ricobana Abadi

(June 23, 2023)--PEFINDO has affirmed its idCCC ratings to PT Ricobana Abadi (RICO) and its Medium-Term Notes (MTN) I Year 2017. The outlook for the corporate rating is revised to “Negative” from “CreditWatch with negative implication” following the approval from MTN holder to extend its remedial period for another 90 days to September 19, 2023.

Currently both RICO and MTN holder are still waiting for the legal process related to the mutual funds which use RICO’s MTN as the underlying portfolio. Initially, the Company has failed to address its maturing MTN amounting of IDR400 billion due on December 20, 2022.

The corporate rating reflects the Company’s high customer concentration risk, aggressive capital structure and vulnerable cash flow protection measures with limited financial flexibility, and exposure to fluctuation of coal price. Those concerns are partially offset by its established presence in the industry.

The rating may be lowered if the Company fails to finalize the restructuring process within remedial period. We may revise the outlook to stable if the Company successfully resolves its MTN restructuring process.

RICO was established in February 1981 and operated as coal mining contractor since 2007 with activities including overburden removal, coal hauling, and heavy equipment rental. RICO is an indirect subsidiary of PT SMR Utama Tbk through PT Ricobana and is ultimately owned by PT Trada Alam Minera Tbk. As of March 31, 2023, the Company was owned by PT Ricobana (100.00%) and Mr. Wijaya Mulia (0.00%). (ends)