PEFINDO has revised the outlook for PT Angkasa Pura I (APAI)’s rating to stable

(August 1, 2022)--PEFINDO has revised the outlook for PT Angkasa Pura I (APAI)’s rating to stable after it has completed the restructuring proposal of its loan facilities approved by all 14 creditors on July 15, 2022. The loan restructuring includes a new interest rate, partial deferral of interest payments until 2023, and adjustment of loan tenor until December 2031. We are of the view that the restructuring will provide APAI with significant cash relief as the financial obligation will align with the cash flow recovery from its operation. The ratings for APAI’s Bond I, and shelf-registered (SR) Bond I were maintained at idAA+. At the same time, PEFINDO also affirmed its idAA+(sy) ratings for APAI’s Sukuk Ijarah I and SR Sukuk Ijarah I.

The corporate rating reflects strong government support for APAI due to the strategic importance of airports, strong economy of service area, and solid track record in aero and non-aero revenue. The rating is constrained by its weak financial profile due to pandemic.

We may upgrade the rating if APAI consistently achieves its projected revenue and/or EBITDA and improves its financial profile on a sustained basis. We may lower the rating if passenger demand falls significantly below our expectations of a sustained recovery, hindering the turnaround of APAI’s earnings. We may also lower the rating if signs of constrained liquidity and weakened financial flexibility are present. The rating may also be lowered if we view a weakening in government’s commitment to providing extraordinary support.

APAI operates 16 airports, majority of which are located in the central and eastern parts of Indonesia. It is the operator of I Gusti Ngurah Rai International Airport in Bali, which is the second busiest airport after Soekarno-Hatta International Airport, serving an average of around 23 million passengers in in 2017-2019. In 2021, APAI, through a joint venture with Incheon International Airport Corporation and state-contractor PT Wijaya Karya (Persero) Tbk, was rewarded a 25-year contract to construct, expand, and operate the Hang Nadim Airport in Batam.

APAI is 99% owned by PT Aviasi Pariwisata Indonesia (Persero) (Aviata), a state-owned enterprise appointed by the government as the holding company for aviation and tourism-related enterprises, and the remainder 1% owned by the government through a golden share. (ends)