PEFINDO has affirmed its idCCC ratings to PT Ricobana Abadi

(December 11, 2023)--PEFINDO has affirmed its idCCC ratings to PT Ricobana Abadi (RICO) and its Medium-Term Notes (MTN) I Year 2017. Outlook for the corporate rating is “negative”,reflecting high certainty of potential rating downgrade if RICO is unable to extend theremedial period and obtain approval restructure the MTN. Initially, the Company hasfailed to address its maturing MTN amounting of IDR400 billion due on December20, 2022, and since then RICO has obtained extension for the remedial period. TheCompany is currently in the process to extend the remedial period which will expireon December 16, 2023. Both RICO and MTN holder are still waiting for the legalprocess related to the mutual funds which use RICO’s MTN as the underlyingportfolio, before MTN’s restructuring proposal can be further processed.

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

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 September 30, 2023, the Company was owned by PT Adibrata Cipta (previously PT Ricobana) (99.99%) and Mr. Wijaya Mulia (0.01%). (ends)