S&P lifts MGTI

Standard & Poor's said it raised the issue credit ratings on MGTI Finance Co. Ltd. to BB- from B+ following a $105 million debt repayment, or 39% of its existing debt, in September.

The outlook is stable.

"The company's management has also confirmed that there are no legal proceedings against it currently over the amendment of the KSO agreement in January 2004, and our rating action reflects this," credit analyst Yasmin Wirjawan said in a written statement.

The company has a fixed-line telecommunications network in the Central Java area known as KSO IV.

"If Telkom defaults on its obligations to MGTI, MGTI may exercise its right to take over operational and financial control of KSO IV while continuing to have recourse on Telkom," Wirjawan said. "However, MGTI may not be able to assume the operations of KSO IV in a timely and efficient manner due to limited expertise and employees."

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