Fitch: Indika Energy on positive watch

Fitch Ratings said it placed PT Indika Energy Tbk.'s long-term foreign- and local-currency issuer default ratings of B- on Rating Watch positive.

Also placed on positive watch are Indika's outstanding senior notes due 2023 and Indika Energy Capital II Pte Ltd.'s $265 million senior notes due 2022. The notes are rated B- with a recovery rating of RR4.

The positive watch reflects an expectation of improvement in Indika's credit profile after the proposed acquisition of an additional 45% stake in PT Kideco Jaya Abung (Kideco) – Indika's key coal-mining asset, Fitch said.

The agency said it believes the acquisition will enhance Indika's control over Kideco's operational and financial strategy and increase its access to Kideco's cash.

This is credit positive relative to the incremental debt that will be occurred to finance the acquisition, Fitch said.

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