Indonesia’s Cikarang Listrindo Sold Its Unit to Mancorp BV

Moody's Investors Service has revised the outlook on PT Cikarang Listrindo Tbk (IDX: POWR) ratings to positive from stable - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian power producer, PT Cikarang Listrindo Tbk (IDX: POWR) sold its share in Listrindo Capital BV to Holland’ ManCorp BV for almost US$2 million. This share sale is part of the company’ restructuring, it said on Wednesday (10/02).

The company spokesman Christanto Pranata explained, the producer has signed a share purchase sale on Sept. 28.

Cikarang Listrindo is a company engaged in the field of power generation, marketing, distribution and electric power agents. The company began operating commercially since November 1993 and has a power plant in Cikarang, Bekasi.

The international rating agency, Standard and Poor’s (S&P) Global Ratings upgraded PT Cikarang Listrindo Tbk (IDX: POWR) debt securities grade from BB to BB+, the highest in the company’s achievements.

In a press release on Tuesday (06/11), Cikarang Listrindo management claimed that it is now the third best private company, after PT Astra International Tbk (IDX: ASII) dan PT Profesional Telekomunikasi Indonesia.

Meanwhile, for non-investment grade private category, POWR ranks are the top of all private companies assessed by the S&P. Issuers engaged in the electricity sector are considered to have good prospects in line with the improving economic conditions in Indonesia.

S&P said that the company’s performance will remain good because the ability to produce strong financial performance with leverage is maintained and operates efficiently in the next 12 months to 18 months. This condition was also reflected in the quarter I/2019 performance in which POWR posted a net profit of US$27.5 million or grew 20.1 percent on an annual basis.

“We raised the rating on POWR because we believe the company is well positioned to benefit from Indonesia’s solid growth prospects. This is given POWR’s captive market position and the improved credit quality of its counterparties such as PT Perusahaan Listrik Negara (PLN),” the agency said.

“The stable outlook on POWR reflects our expectation that the company will maintain stable cash flows, moderate leverage, and have efficient operations over the next 12-18 months,” it said.

On the other hand, the POWR is called having a maintained debt risk. This can be seen from the level of net debt to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) 1.6 times or far beyond the minimum requirements.

POWR currently serves 2,400 industrial customers in five industrial estates in Cikarang, West Java. The company owns and operates the gas and coal-fired power plants with capacities of 864 megawatts (MW) and 280 MW respectively. Thus, the total installed POWR generating capacity is currently 1,444 MW.

The company plans to commercialize the use of new and renewable energy plants in 2019. This is one of the company’s transformations in providing better services. The company budgeted capital expenditure of around $40 million – $50 million obtained through the company’s internal funding. About $20 million – $25 million of budgeted capital expenditure will be used to maintain gas and coal power plants.

Listrindo Capital is a subsidiary of Cikarang Listrindo with 100 percent ownership. Beside Listrindo Capital, the company also has PT Bahtera Listrindo Jaya and Signal Capital BV with ownership of 99 percent and 100 percent, respectively.

Cikarang Listrindo previously took over Listrindo Capital’s senior notes worth of $547 million. This is indicated by the approval of the debt holders obtained by the company on August 29, 2019.

Pranata said, an additional indenture that enact changes was signed on August 29, 2019 and had been agreed upon by the holders of the debt securities. According to Pranata, this action did not have a material adverse effect on operational activities, law, financial condition or business continuity of the company. On the contrary, this action has a good influence on the company.

Listrindo Capital previously issued a global bond worth of $550 million on September 13, 2016. The bonds have a coupon of 4.95 percent and will mature in 2026. As of August 14, 2019, the principal amount of this bond became$547 million.

Meanwhile, the addition of debt securities to the name of Cikarang Listrindo has been recorded in the liability account in the company’s consolidated financial statements. As of June 2019, the total company liabilities reached $663.7million, increased slightly from December 31, 2018 position which reached $668.54 million.

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