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Wednesday, May 5, 2010

Arpeni rating possibly worsening: Management targets transportation contract for 3-5 million tons of coal

Wednesday, 05/05/2010 00:00 WIB

Arpeni rating possibly worsening: Management targets transportation contract for 3-5 million tons of coal

JAKARTA: PT Arpeni Ocean Line Tbk failed to pay the global bond coupon for the second time on May 3. Research conducted by PT Fitch Ratings Indonesia shows the coupon is worth US$6 million.

The research also shows the bond rating is potentially to be degraded to RD level if the company fails to pay the bonds within 30 days. The company still has grace period since the due date of coupon payment on May 3.

"The internal cash growth of Arpeni shows discomfort in relation to the corporate ability to pay the coupon on the grace period," said Director of Corporate Ratings Fitch team Buddhika Piyasena on the research published yesterday.

Formerly, the company could pay the same bound coupon December 2009 but the rating was not degraded as it could pay during the grace period.

Arpeni finance is worsening due to the highly indebtedness, derivative contract cost crystallization, and corporate reserve cash placement worth US$25 million as the collateral bank obligation and relevant creditors to the debt and low operational income.

He recorded the company has US$12 million cash reserves last year showing that the emitter finance did not have any significant performance from last year.

Formerly, PT Pemeringkat Efek Indonesia (Pefindo) also set CCC, credit watch, rating and thus had negative implication to the Arpeni Pratama Ocean Line II/2008 bonds worth IDR600 billion.

In public expose to IDX April 16, Pefindo was stated to give CCC rating to the medium term notes sharia II/2008 worth IDR150 billion.

The rating company set the selected default (SD) rating to PT Arpeni Pratama Ocean Line Tbk (APOL) on 12 April-12 July 2010.

Arpeni Line booked IDR670.61 billion net losses last year or dropped by 6.867 percent as from IDR9.92 billion net profits in 2008.

When tried to be confirmed, Arpeni Finance Director Ateng Suhendra can not explain about the default or the company's effort to pay off the bond's coupon. "I'm out of town right now, please contact Ronald [Arpeni Director & Corporate Secretary Ronald Nangoi]."

But Ronald and Arpeni President Director Oentoro Surya's cell phone can not contacted yesterday. They also didn't reply the short message service that sent yesterday.

In the APOL finance statement addressed to the IDX, it was mentioned that the falling performance of sea transportation company was driven by the plummet of revenue and business profits.

Arpeni revenue dropped by 33.46 percent from IDR2.57 trillion in 2008 into IDR1.71 trillion last year so the business profit was slashed by 79.40 percent from IDR695.46 billion in 2008 into IDR143.23 billion 2009.

Arpeni also suffered from losses of the derivative transactions worth IDR398.99 billion in 2009 swelling up from IDr361.58 billion in 2008.

Cost of interest also swelled from IDR294.05 billion in 2008 into IDR382.08 billion. Arpeni also recorded doubted debt of IDR117.64 billion last year.

Oentoro last month said the company planned to have bond buyback upon accomplishment of corporate recovery condition. He said the bond due date is 2013.

"We commit to always pay the bond coupon. We will have bond buyback when the company condition gets better," said Oentoro.

Arpeni projected to tap coal transportation contract worth US$50-75 million or 3-5 million tons in 2010.

He said there are some coal transportation projects that are projected to be gained by the company this year.

"At least we could target new contract up to US475 million this year. Now we still focus on the company operational betterment so we hope we could tap 5-10 percent growth this year," he added.

Arpeni recently provided loans to two shareholders, PT Ayrus Prima and PT Mandira Sanni Pratama. Those two got credits from Bank UOB Indonesia.

Ayrus Prima got US$ 15.15 million loans from UOB. Arpeni provides maximum guarantee of US$12.15 million.

Meanwhile, Mandira Sanni Pratama gained US$28.15 million loans from Bank UOB and Arpeni provides maximum guarantee of US$18.15 million.

In public expose to IDX, the APOL stock emitter mentioned both shareholders will pay compensation fee for the guarantee given every end of six months period since August 11, 2009. The compensation fee is 0.75 percent per year as calculated from the maximum amount of the guarantee given.

The collateral here is the compensation of the shareholders for the long term loans they had given.

The emitter's stock closed at Rp152 yesterday that formed its market capitalization as much as Rp455 billion.(Bisnis/iaa/faa)

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