PEFINDO has lowered the rating of PT Ricobana Abadi (RICO) and its Medium-Term Notes I Year 2017 to idCCC from idBB-

(October 18, 20220)--PEFINDO has lowered the rating of PT Ricobana Abadi (RICO) and its Medium-Term Notes I Year 2017 to idCCC from idBB-. The outlook for the corporate rating is maintained at “CreditWatch with negative implication”. The rating action reflects the high uncertainty of the Company’s ability to repay or refinance its maturing MTN I Year 2017 of IDR400 billion due on December 20, 2022 in a timely manner, following the Company’s weakened financial figures and limited financial flexibility, while the restructuring proposal has been rejected by the investors.

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 secure the payment of its maturing MTN I Year 2017. We may revise the outlook to stable if the Company could promptly obtain sufficient funding sources to repay or refinance its maturing MTN.

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 June 30, 2022, the Company was owned by PT Ricobana (100.00%) and Mr. Wijaya Mulia (0.00%). (ends)