Standard & Poor's: Apexindo Pratama Duta affirmed before being withdrawn at issuer's request

(Singapore, April 2, 2014) -- Standard & Poor's Ratings Services today affirmed its 'B+' long-term corporate credit rating and 'axBB' long-term ASEAN regional scale rating on PT Apexindo Pratama Duta Tbk. The outlook was stable. We then withdrew all ratings on Apexindo at the company's request.

The 'B+' rating on Apexindo prior to our withdrawal reflected our view of the company's ownership by financial sponsors, our expectation of cash flows remaining consistent with an "aggressive" financial risk profile, the company's small fleet, and its limited asset diversity.

We expected Apexindo's financial risk profile to remain "aggressive" despite the company's Raissa offshore rig being offline since November 2014. We believed the damaged Raissa rig would become fully operational in September 2014, with insurance covering most of the refurbishment costs. The days lost in operations would reduce cash flows in 2014. Nevertheless, the higher contracted day rates and increased utilization on offshore rigs should reduce the company's debt leverage to below 4x during the year.

We expected Apexindo's interest coverage to rise above 3.5x in 2014 from about 2.6x in 2012, with the ratio of funds from operations to debt at 13%-17%. We expected Apexindo's capital expenditure, excluding Raissa, and asset purchases to be minimal in the next 12-18 months. The aggressive financial risk profile also incorporated our view of the company's ownership by financial sponsors.

Apexindo's "weak" business risk profile reflected the company's small fleet and limited asset diversity. The company's strong market position in Indonesia and the high credit quality of its customers tempered the above risks. Apexindo's strong operating and profitability record and revenue visibility arising from medium-term contracts further supported its business risk profile. (ends)