Release: Fitch Affirms Indika at 'B' on Petrosea Acquisition Plan; Outlook Positive

Fitch Ratings-Jakarta/Singapore-02 March 2009: Fitch Ratings has today affirmed PT Indika Energy Tbk's (Indika) Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B', following the company's announcement on 26 February 2009 that it plans to acquire a 81.95% stake in PT Petrosea Tbk (Petrosea, an engineering and construction contractor with mining capability) for an indicative purchase price of USD83.8m. The Outlook remains Positive. Fitch has also affirmed its 'B' senior unsecured rating on Indika's USD250m senior notes due in 2012, with a recovery rating of 'RR4'.

The acquisition is in line with Indika's strategy for expansion in the energy sector in the areas of resources, infrastructure and service businesses. Petrosea's business, which complements Indika's existing businesses, could result in greater synergies across the company's major business activities. Funding for the acquisition will come from Indika's internal cash reserves; as at 30 September 2008, Indika had cash and cash equivalent of IDR2.7trn and the company also retained around IDR1trn of the proceeds of its USD250m notes issue in May 2007. The transaction is subject to Indika's satisfactory due diligence and shareholder approval, and will likely achieve closure by mid-2009. The agency will continue to monitor the progress of the transaction.

A positive rating action may only be taken upon the successful acquisition and implementation of new investment plans, and if Tripatra (a leading engineering, procurement and construction and operations and maintenance service provider with a focus energy and infrastructure projects) continues to demonstrate the ability to secure new orders. Conversely, an Outlook revision may be warranted if dividend flows from Kideco (Indonesia's third-largest coal producer and operates under a 30-year Coal Contract of Work) is reduced, new investment projects produce weak returns, and/or Tripatra fails to obtain new orders.

Established in 2002, Indika is a privately-owned investment holding company with two major investment assets - a 46% stake in Kideco and a 100% stake in Tripatra. Indika reported revenues and net income of IDR1.95trn and IDR724bn, respectively for the first nine months in 2008.

Contacts: Jessie Wahab, Jakarta, +62 21 526 7949/ jessie.wahab@fitchratings.com; Kalai Pillay, Singapore, +65 6796 7221/ kalai.pillay@fitchratings.com.

Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email: shivani.sundralingam@fitchratings.com.

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