S&P rates Gajah Tunggal

Standard & Poor's said it assigned its B corporate credit rating to PT Gajah Tunggal Tbk.

At the same time, the agency said it assigned its B rating to the proposed $250 million senior unsecured bonds due 2010 to be issued by GT 2005 Bonds BV, and irrevocably and unconditionally guaranteed by Gajah Tunggal.

The rating on Gajah Tunggal takes into account its aggressive financial policy, weak cash flow protection measures and inherent industry risk, S&P said.

These weaknesses are partly offset by its low cost profile, strong domestic market position, geographic diversity in sales and its strategic alliance with Michelin, the agency added.

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