Fitch ups Indika Energy

Fitch Ratings said it upgraded PT Indika Energy Tbk's long-term foreign- and local-currency issuer default ratings to B+ from B and the senior unsecured rating of the $250 million senior notes due in 2012 issued by Indo Integrated Energy BV and guaranteed by Indika and its 100%-owned subsidiary, PT Indika Inti Corpindo to B+ from B with a recovery rating of RR4. The agency said it assigned an expected issue rating of B+ and an expected recovery rating of RR4 to the proposed dollar-denominated fixed-rate senior notes to be issued by Indo Integrated Energy II BV and guaranteed by Indika and Indika Inti Corpindo. The rating is contingent upon receipt of final documents.

The outlook is stable.

The upgrades reflect the fact that the dividend flows from Indika's 46%-owned associate, PT Kideco Jaya Agung, rose significantly to $210 million in 2008 from $90 million in 2007, Fitch said.

The ratings continue to be constrained by Indika's status as an investment holding company that derives most of its cash inflow in the form of dividends from Kideco, the agency said.

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