S&P turns Lippo Karawaci view to stable

S&P said it revised Lippo Karawaci Tbk.’s outlook to stable from negative and affirmed its B- ratings.

“Lippo holdco's operating cash flow deficit is reducing. We expect the company's operating cash flow deficit to sustainably reduce over the next 12-18 months on the back of increasing property sales, reduced rental expenses, a modest increase in dividends from subsidiaries, and lower construction costs. This will reduce Lippo holdco's reliance on one-off asset monetization events that are less certain and lumpy,” S&P said in a press release.

The agency said it sees anticipate Lippo holdco's operating cash flow deficit (excluding one-off events such as asset sales or share disposal) will fall to Rp 1.5 trillion to Rp 1.6 trillion in 2021, and to Rp 300 billion to Rp 400 billion in 2022, from about Rp 2.5 trillion in 2020. Net proceeds from the the Puri Mall sale will further reduce the 2021 cash burn to Rp 500 billion to Rp 600 billion.

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