Release: Fitch withdraws Berau Coal's ratings

(Jakarta/Singapore-02 March 2010): Fitch Ratings has today withdrawn PT Berau Coal's (Berau) Long-term foreign and local currency Issuer Default Ratings (IDRs) of 'B+' and National Long-term rating of 'A(idn)'. The ratings were on Rating Watch Evolving (RWE) at the time of withdrawal. Fitch will no longer provide ratings or analytical coverage of this issuer.

The withdrawal follows Berau's full redemption of its USD325m senior notes due 2011, issued by Empire Capital Resources Pte Ltd and guaranteed by Berau on 28 December 2009, prior to their maturity. This is due to the change in Berau's controlling shareholder. As the company is privately owned, Berau has ceased to make public disclosure of its financials following the redemption. The company took out a bridging loan to finance the redemption and has not made public any plans to refinance the loans and/or its new capital structure.

Fitch placed Berau's ratings on RWE on 8 December 2009, following the company's offer via a Notice of Redemption to redeem the senior notes. The agency had stated then that Berau's ratings would have to be reassessed based on the company's new financing and business plans. The ratings, prior to their withdrawal, reflected the company's steady revenues and operating cash generation supported by established long-standing relationships with long-term contracts in place; however, its exposure to commoditised coal prices as well as high customer concentration risk constraints its ratings. (end of release)