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May 26 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed the Issuer Default Rating Long-Term Rating (IDR) Star Energy Geothermal (Wayang Windu) Limited (SEG) at ‘B +'. Outlook is Stable. At the same time, Fitch has affirmed the senior debt (senior secured notes) of the company USD 350 million, which will mature in 2020 at ‘B +’ with a Recovery Rating (Recovery Rating) at ‘RR4’
The ratings reflect the risks SEG innate geology of operations and expansion capital intensive. The ratings also measured considering the company’s revenue, because the track record good operational performance, as well as energy sales contract (ESC) term long.
Factors Ranked movers
Terukurnya Income: Sales SEG based on ESC that ended in 2036 PT State Electricity Company (Persero) (PLN; BBB-/Stabil), which contains rate adjustment for exchange rate changes and inflation. SEG has never faced serious delay in payment of PLN in 2004.
Stable Operations: SEG operates by selfishness average net capacity factor more than 95% - above the industry average - since the start of operations in the , 2000. Geothermal resources, which is verified by an independent, capable support large power plant 287MW (227MW capacity is now) until 2039.
Geological risk: The ratings reflect the risks of geological SEG in operating in a seismically active area, especially with the location of a single operation. will However, this risk, reduced to a certain level by the insurance policy covers most of the costs of generation, as well as business interruption during 24 months.
Expansion uncertain: The ratings SEG limited by uncertainties associated with development potential. Capital expenditures for the addition capacity with a large enough scale can be substantial in relation to the SGE balance. Geothermal sources SEG mundukung new capacity additions and the company continues to conduct a feasibility assessment of the capacity addition Further, especially in connection with the negotiation rate increase by PLN and excavations associated with rock permeability under surface.
Adequate financial profile: Fitch expects to produce SEG Annual EBITDA between USD 80juta and USD90juta, capital expenditures limited to maintenance and not pay substantial dividends in medium term, which will help to reduce the level of debt in gradually in the next few years. Fitch also expects internal cash generated will be sufficient to pay maturing bonds between USD 30 million and USD 40 million per year between 2017 and 2019.
SEG funds from operations (FFO) - the level of net debt rose to 4.97x in 2013 from 2.97x in 2012. Increase in subordinated debt payments due shareholders of USD 85juta. (Fitch does not treat this loan as the mindless nature of subordinate debt and lack of interest expense), as part of the refinancing of bonds in 2013.
Negative: future developments that may, individually or collective downgrade include:
- FFO - net debt levels exceed 5.0x and FFO interest coverage fell in below 2.0x (1.7x in 2013), on an ongoing basis for both.
Positive: future developments that may, individually or collectively raise the ranking include:
- Ranking positive action is not expected within 12 to 18 months. However, Fitch will consider the ranking of positive action when there kejalasan in SEG capital expenditure in the future, the capitalization structure and when the company is able to reduce the level of debt in sustainably below 3.5x.