Release: Fitch: Indika's ratings not affected by halt in Kideco's mining activities

Singapore-01 July 2010: Fitch Ratings says the temporary stoppage of surface mining activities at PT Kideco Jaya Agung (Kideco)'s coal project does not immediately affect the ratings of its parent, PT Indika Energy Tbk (Indika) ('B+'/Stable).

Kideco's overburden removal activities were halted on June 28 2010 after an accident that resulted in a casualty. The cause of the incident is currently being investigated and it remains unclear when overburden removal will resume again. Indika's management has informed Fitch that all other mining activities are still ongoing, and that Kideco has roughly about one-month of stockholding as a buffer against any potential disruption in production activities. However, Fitch notes that any long term disruption of overburden removal that curtails dividend flows from Kideco to Indika may result in a negative rating action, as Indika's credit profile is supported primarily by the said dividend flows.

Incorporated in 2002, Indika is an investment holding company with a 46% stake in Kideco, the third largest coal miner in Indonesia; a 100% stake in Tripatra Group (PT Tripatra Engineers and Constructors and PT Tripatra Engineering -- both of which are leading engineering and construction companies in Indonesia); and a 98.55% stake in PT Petrosea Tbk, the fifth largest mining contractor in Indonesia. In the first quarter ending March 2010, Indika posted revenue of IDR748.4bn and net income of IDR291.7bn. (end of release)