PEFINDO: PT Merdeka Copper Gold Tbk’s maturing bond rated “idA”

(June 8, 2021)--PEFINDO has affirmed its “idA” rating for PT Merdeka Copper Gold Tbk’s (MDKA) maturing Shelf Registered Bond I Phase I Year 2020 Serie A of IDR673.65 billion due on August 7, 2021 and Shelf Registered Bond I Phase II Year 2020 Serie A of IDR149 billion due on September 16, 2021. MDKA plans to repay its maturing Bonds using combination of internal cash and proceeds from external funding.

As of March 31, 2021, MDKA had cash and cash equivalent of USD277.4 million.

Debt security rated idA indicates that the issuer’s capacity to meet its long-term financial commitments on the debt security, relative to other Indonesian issuers, is strong. However, the issuer’s capacity is somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than higher-rated issuers.

The corporate rating reflects MDKA’ low cash cost position, potentially higher revenue stream from its Acid Iron Metal (AIM) project, and the high demand for gold. The rating is constrained by its limited mining reserves, exposure to the fluctuation of gold prices and unfavorable weather, and risk of developing new areas.

MDKA was established in 2012 and engages in mining activities. It has two projects located in Bukit Tumpang Pitu, Banyuwangi for gold mining and Wetar Island, Maluku for copper mining. As of March 31, 2021, its shareholders were PT Saratoga Investama Sedaya Tbk (18.29%), PT Mitra Daya Mustika (12.87%), Garibaldi Thohir (7.84%), PT Suwarna Arta Mandiri (6.05%), Pemda Kabupaten Banyuwangi (4.25%), and others including the public (50.7%). (ends)