Moody's may downgrade Gajah Tunggal

Moody's Investors Service said it placed Indonesia-based PT Gajah Tunggal Tbk.'s B2 corporate family and senior unsecured bond ratings on review for possible downgrade.

The review is in response to the weaker-than-anticipated financial results reported by the company for the year ended Dec. 31, the agency said. EBITDA to interest is expected to fall below 1.5x, a level that Moody's previously said would place downward pressure on the ratings, and lower-than-anticipated cash flow and cash reserves create uncertainty as to the strength of the company's liquidity profile.

Moody's said its review will focus on the company's earnings profile, margins, exposure to increases in raw material prices and ability to pass through such price increases to consumers.

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