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The Jakarta Globe reported that Fitch Ratings has said that AdaroEnergy's proposed plan to acquire a Greenfield coal mine inEast Kalimantan will not affect its rating because it will notaffect its exposure to risk. It said "There is no immediate impact to coal miner AdaroIndonesia's rating," Fitch said in a statement releasedon Friday. Adaro Indonesia is a unit of Adaro Energy. Adaro Energy signed an agreement on May 28 for options to acquire a51 percent stake of coal miner Bhakti Energi Persada in three yearsby providing USD 500 million worth of convertible bonds for a 3year period. Adaro, which already has a 10.2% stake, can also buyfrom current shareholders' 79.8% stake. Bhakti has seven mining business licenses for coal concessions withestimated coal resources of 9.53 billion tonnes. Fitch said the Greenfield status meant a large investment wasrequired prior to production. Still, the rating agency said itbelieved "any investments in the first half of the three-yearoption period will not be significant and can be funded from AdaroEnergy's projected internal cash generation." Adaro also runs a risk with its planned purchase because Bhakticoal mines "have substantially lower cash margins than AdaroEnergy's currently main cash-generating mine, Tutupan, andare more susceptible to low coal prices," Fitch added. Bhakti has resources of low-calorie coal that will trade at asubstantially discounted price from the benchmark thermal coalprice, it said. Adding to the potential risk was speculation of a possible duty oncoal exports. On Thursday, however, the minister of energy andmineral resources, Jero Wacik, said the government had no plan toimpose the tax. Fitch said Adaro's option to invest in Bhakti'sresources, rather than to outright buy the company, would provide asignificant level of flexibility and safety. "If successfully executed, Bhakti can over time contribute tothe increasing diversity of Adaro Energy's miningoperations," the ratings agency said. "The limited diversity of Adaro Energy's existing minesites is one of the factors currently constraining itsratings." A negative rating action could result if Adaro increased its grossleverage funds for operations or deviated from its policy ofmaintaining strong liquidity, Fitch said. It could also come fromadverse regulatory developments that significantly impairedAdaro's financial profile, other substantial investments thatweakened the company's financial or operating risk profile ora sustained weakening of coal prices Source - The Jakarta Globe (). The e-commerce company in China offers quality products such as China Piston Filling Machine , China Hydraulic Tablet Press, and more. For more , please visit Liquid Filling Machines today!
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