Fitch rates Excelcomindo Pratama B+

Fitch Ratings said it assigned PT Excelcomindo Pratama a B+ senior unsecured foreign currency rating and a senior unsecured local currency rating of B+.

The outlook is stable.

"Excelcom's ratings reflect its established position in the Indonesian cellular sector, its robust growth with still-promising growth potential and cash generative operations," said Priya Gupta, senior analyst in Fitch's Corporates group.

Fitch also views Telekom Malaysia's recent strategic investment in Excelcom positively, owing to Telekom's superior credit quality and its capacity to provide financial and operational support to Excelcom. The rating also takes into account operational synergies in terms of capex savings and cross-border opportunities that would be derived from the relationship with Telekom.

However, the rating uplift for parental support is constrained by the structure of existing Malaysian capital controls. In event of a distress scenario, it may be operationally difficult for Telekom to provide immediate financial support to ensure timely servicing of Excelcom's obligations, the agency said.

"The rating also factors in the probability that any support would likely come in the form of loans or quasi-debt rather than pure equity, leaving Excelcom's ratings constrained by high leverage," added Gupta.

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