Fitch cuts Lippo Karawaci to B+

Fitch Ratings said it downgraded PT Lippo Karawaci Tbk.'s long-term issuer default rating to B+ from BB-.

At the same time, Fitch Ratings Indonesia affirmed the company's national long-term rating at A+(idn).

The outlooks are stable.

“The downgrade reflects our expectations of significantly reduced cash flow access from property sales following the company's strategic decision to divest a substantial stake of its flagship Meikarta project, which the company owns via its 54%-held subsidiary, PT Lippo Cikarang Tbk (LPCK),” Fitch said in a news release.

“We forecast Lippo to generate property sales of around Rp 700 billion-800 billion annually over the medium-term excluding the Meikarta project. This compares to attributable presales of around Rp 4 trillion before plans to divest the project.”

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