Fitch changes ABM Investama to negative

Fitch Ratings said it revised the outlook on PT ABM Investama Tbk. to negative from stable and affirmed its long-term foreign-currency issuer default rating at BB-.

The agency also affirmed the BB- rating on the company’s dollar-denominated senior notes.

Fitch said it revised the outlook due to continued weakness in ABM Investama’s business of providing coal mining services, despite the recovery in coal prices in 2017, which resulted in higher than expected leverage at end-2017.

“The company plans to strengthen the coal contracting business in 2018, including hiring an external consultant to help optimise the company's repair and maintenance efficiency and revising the pricing structure of existing contracts,” the agency said in a news release.

“Fitch believes that if the overhaul is successful, ABM's credit profile will remain in line with a BB- rating, based on our coal price deck assumptions.

“However, implementing the changes carries risks and we will monitor the progress closely.”

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