Moody's cuts Lippo Karawaci view to negative

Moody's Investors Service said it has changed to negative from stable its outlook for Indonesia-based PT Lippo Karawaci Tbk's B1 corporate family rating and the B1 senior unsecured bond issued by Lippo Karawaci Finance BV and guaranteed by Lippo Karawaci.

The outlook change is in response to the company's weaker-than-anticipated financial results for the first nine months of 2006, Moody's said.

An operating cash flow deficit was reported because of lower sales of strata-title mall due to a softened market demand for lower-class shopping malls and the company's shift in strategy to lease malls, the agency said.

Downgrade pressure would evolve if Lippo Karawaci fails to execute its strategy as planned or its operating results in the coming quarters continue to underperform, the agency said.

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