PEFINDO: PT Chandra Asri Petrochemical Tbk’s maturing bond rated “idAA-”

(March 30, 2022)--PEFINDO has affirmed its “idAA-” ratings for PT Chandra Asri Petrochemical Tbk (TPIA)’s Shelf Registered Bond II Phase II Year 2019 maturing on May 29, 2022 of IDR750 billion. TPIA plans to fully repay its maturing bonds with internal cash. As of December 31, 2021, it had cash and cash equivalent of USD2.0 billion, including time deposits of USD0,4 billion and unused proceeds of USD1.1 billion from right issue allocated for the development of the new integrated petrochemical plant. A debt security rated idAA differs from the highest-rated debt only to a small degree. The issuer’s capacity to meet its long-term financial commitments on the debt security, relative to other Indonesian issuers, is very strong. The minus (-) sign indicates that the rating is relatively weak within its category.

TPIA is an integrated petrochemical producer, providing olefins, polyolefin, styrene monomer, butadiene, methyl-tertiary-butyl-ether (MTBE), and butene-1. It owns the only naphtha cracker, styrene monomer and butadiene plants in the country. Its production facilities include a naphtha cracker with a total production capacity of 2,138 kilo tons per annum (KTA), a polyethylene plant with 736 KTA capacity, a styrene monomer plant with 340 KTA capacity, a polypropylene plant with 590 KTA capacity, a butadiene plant with 137 KTA capacity, a MTBE plant with 128 KTA capacity, and a butene-1 plant with 43 KTA capacity. The Company has completed Rights Issue in September 2021 of USD1.1 billion, which will be used to partly finance the development of the second petrochemical complex. From the said corporate action, PT TOP Investment Indonesia, a subsidiary of Thai Oil Public Company Limited has become TPIA’s new shareholder.

We are of the view that the presence of the new shareholder will give additional financial flexibility to support the second petrochemical complex development. As of December 31, 2021, it was owned by PT Barito Pacific Tbk (34.6%), SCG Chemicals Co Ltd (30.6%), PT TOP Investment Indonesia (15.0%), Prajogo Pangestu (7.8%), Marigold Resources Pte Ltd (3.9%), and the public (8.1%). (ends)