Fitch Ratings has today revised PT Central Proteinaprima Tbk's (CP Prima) long-term foreign currency Issuer Default Rating (IDR) to C from RD.
The rating of the US$325m senior unsecured notes due in 2012 (the notes), issued by Blue Ocean Resources Pte Ltd (Blue Ocean) and guaranteed by CP Prima and its subsidiaries, remains at C with a recovery rating of RR4.
The rating action follows CP Prima announcement of a six-month standstill agreement on 17 February 2010 to the Indonesia Stock Exchange, which was approved by noteholders who represent more than 50% of the aggregate principal of the notes.
The rating action follows CP Prima announcement of a six-month standstill agreement on 17 February 2010 to the Indonesia Stock Exchange, which was approved by noteholders who represent more than 50% of the aggregate principal of the notes.
According to the agreement, the noteholders will not demand early repayment of the USD notes, execute guarantees provided by the company and its subsidiaries in relation to the notes, and/or make any claims for bankruptcy filing against the company or Blue Ocean, during the six-month period.
CP Prima expects to submit a restructuring proposal to the noteholders before the end of the standstill period. It is the agency's view that since CP Prima has yet to find a solution to contain the virus contamination of its ponds, the occurrence of a Coercive Debt Exchange (CDE), in accordance with Fitch's CDE criteria, appears plausible. Should a CDE occur, CPP's IDR will be downgraded to 'RD'.
The agency will continue to review the RR4 recovery rating because a prolonged virus contamination problem could permanently impair CP Prima asset quality and cash generating ability.
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