Moody’s could upgrade Indika

Moody's Investors Service said it placed the B2 corporate family rating of Indika Energy Tbk., the B2 ratings on the $500 million backed senior secured notes issued by Indo Energy Finance II BV and the $265 million backed senior secured notes issued by Indika Energy Capital II Pte. Ltd. on review for an upgrade.

The agency said the review follows Indika's announcement on Sept. 25 that it signed share purchase agreements with Samtan Co. Ltd. and Muji Ini Utama to acquire an additional 45% of the shares of Kideco Jaya Agung.

"We view the proposed acquisition of Kideco as credit positive as Indika will gain control over the third largest coal mining asset in Indonesia which has a long reserve life of over 13 years, based on its projected 2017 production volume," Rachel Chua, Moody's assistant vice president and analyst, said in a news release.

“The company's credit profile will also improve post-acquisition, with consolidated leverage of around 3.6x on a look-through basis.”

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