PRESS RELEASE: S&P: Tugu Insurance raised to 'Bpi' from 'CCCpi'

HONG KONG--(BUSINESS WIRE)--May 14, 2003--Standard & Poor's Ratings Services said today that it had raised its public information insurer financial strength rating on Hong Kong-based Tugu Insurance Co. Ltd. (Tugu Insurance) to 'Bpi' from 'CCCpi' following the recent upward revision of the local currency sovereign ratings on the Republic of Indonesia (B/Stable/B).

The rating action on Tugu Insurance reflects the company's ultimate ownership by Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), an oil and gas mining company owned by the Indonesian government. Pertamina directly holds 47.5% of Tugu Insurance and indirectly holds a 52.5% stake through its subsidiaries Tugu Pratama (27.5%) and Tugu Pratama Interindo (25%).

Standard & Poor's, however, recognizes that there is some uncertainty about the status of Pertamina's stake in Tugu Insurance after a Hong Kong court in 2002 issued a garnishment order permitting Karaha Bodas Co. (Karaha Bodas), a U.S. owned company with operations in Indonesia, to seize shares in Tugu Insurance from Pertamina. Pertamina appears to be contesting the court order. In the event that Karaha Bodas secures control of Tugu Insurance, Standard & Poor's will re-assess the impact of the ownership change on Tugu Insurance's strategic direction, business profile, and financial flexibility, and, in turn, the rating on the company.End of Release. (*)