S&P: PT Sri Rejeki Isman view now negative

Standard & Poor’s said it revised its outlook on PT Sri Rejeki Isman Tbk. (Sritex) to negative from stable and affirmed the BB- long-term corporate credit rating on the company.

In line with the outlook revision, S&P lowered its Asean regional scale rating on Sritex to axBB from axBB+. In addition, S&P also affirmed the BB- long-term issue ratings on notes issued by Golden Legacy Pte. Ltd. and guaranteed by Sritex, an Indonesia-based textile producer.

“We revised the outlook to reflect our view that Sritex’s cash flows are likely to fall short of its funding needs for capital expenditure and working capital over the next 12 months,” said S&P credit analyst Vishal Kulkarni in a news release.

This follows the company’s substantial investment in working capital over the nine months ended Sept. 30, 2015. Sritex also has still-sizable capital spending plans for the next 12 months, which will continue to reduce the company’s liquidity headroom, the agency concluded.

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