Pefindo: PT Timah Tbk’s maturing Bond rated “idA”, Sukuk “idA(sy)”

(July 28, 2020)--PEFINDO has affirmed its “idA” ratings for PT Timah Tbk’s (TINS) Bond I, Phase I/2017 - Serie A of IDR480 billion and “idA(sy)” for its Sukuk Ijarah I, Phase I/2017 - Serie A of IDR120 billion that will mature on September 28, 2020. The Company plans to repay its maturing debts using restricted cash of IDR160 billion and value-added tax (VAT) restitution of IDR471 billion, and TINS will preserve its excess cash of minimum IDR100 billion per month (started in June 2020). It had cash and cash equivalent of IDR1.0 trillion as of June 30, 2020. However, we still maintain its negative outlook for TINS’ “idA” corporate rating to anticipate weak EBITDA due to lower than expected tin selling price if COVID-19 prolongs and further lowers the global demand for tin.

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.

Suffix (sy) indicates the rating mandates Islamic principles compliance. Founded in August 1976, TINS is a vertically integrated mining company in Indonesia focused on producing tin ingots. Its main mining operations are in Pangkal Pinang, Bangka Belitung. As of March 31, 2020, its A class shares were owned by the Indonesian government, and its B class shares by PT Indonesia Asahan Alumunium (Persero) (65.0%) and the public (35.0%). (ends)