S&P changes Saka view to negative

S&P said it confirmed the corporate family rating and senior unsecured rating of PT Saka Energi Indonesia at B2 and changed the outlook to negative from under review.

The confirmation and outlook revision end the review started on Jan.7, the agency said.

“The negative outlook reflects the potential deterioration of Saka’s liquidity over the next six to nine months if the outcome of the judicial review of tax penalty is not in favor of the company or if Saka fails to get an extension of its $361 million shareholder loan maturing in January 2022,” said Hui Ting Sim, a Moody’s analyst, in a press release.

“The confirmation of Saka’s B2 rating is based on our assessment that the imminent risk to Saka’s liquidity has been partially mitigated by its plan to seek judicial review of its $127.7 million tax dispute. At the same time, we now expect free cash flows at Saka over the next 12 months will be higher than our previous forecast because of improved oil prices, lower capital spending and certain tax refunds,” added Sim.

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