Moody's lifts Media Nusantara view to positive

Moody's Investors Service said it changed the outlook on PT Media Nusantara Citra's B1 corporate family rating and guaranteed notes rating to positive from stable following the company's initial public offering to raise Rp 3.7 trillion.

"The IPO proceeds will improve MNC's capital structure and enhance its liquidity profile," Wonnie Chu, Moody's lead analyst for the company, said in a written statement. "The company's adjusted debt [to] EBITDA is expected to improve to around 2 times following the IPO and repayments of the [rupiah-denominated] bonds, which would support a low Ba/high B rating."

Moody's also expects that the company will prudently execute its acquisition strategy with regard to its core businesses in Indonesia's television, radio and print sectors.

One-third of the net proceeds will go to PT Global Mediacom, a major shareholder, and Rp 1.8 trillion has been earmarked for capital expenditures and acquisitions.

"Such an aggressive growth plan carries execution risks in view of the company's short track record for integrating acquisitions under its present corporate structure," Chu said.

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