Monday, June 25, 2007

CP Prima Revises up Bonds to US$325 Million

PT Central Proteinaprima Tbk (CP Prima) decided to issue US$325 million bonds instead of US$200 billion it has planned earlier. The company has assigned Barclays Capital to arrange the bonds issuance.
The bonds will be with the tenor of five years and with the yield of 11%. CP Prima has assigned Barclays to arrange the bonds, and the yield is 11%.

The company will use some of the cash to finance the acquisition of PT Dipasena Citra Darmaja in three years. After the acquisition the company has got IDR880 billion loan from Bank Panin.

A consortium of eight foreign banks has disbursed US$200 million for CP Prima last year to refinance the company's debt of IDR185 million and to meet the need on working capital.
CP Prima issues the senior debt through Blue Ocean Resources Pte Ltd, to be fully guaranteed by the company's units.

The company is seeking to issue up to US$400 million bonds to repay the expensive loan of US$200 million and to finance the expansion following the acquisition of Dipasena.

Fitch Ratings has granted B+ rating for the loan term foreign currency debt of CP Prima with the recovery rating of RR4 for the US$325 million bonds of CP Prima. The prospect is stable.
Fitch will issue the final rating if the company has concluded the bonds issuance.

Even though the debt of CP Prima has been increasing, Fitch believes the company's cash flow will be positive next year, and it will improve the debt's rating.

But Fitch warned that the negative free cash flow will harm the company's rating. On the other hand, the ratio of debt to EBITDA (earnings before interest, tax, depreciation and amortization) will also affect the rating.

No comments: