Fitch: Indika Energy unchanged

Fitch Ratings said the temporary stoppage of surface mining activities at PT Kideco Jaya Agung's coal project does not immediately affect the ratings of its parent, PT Indika Energy Tbk, which has B+ ratings and a stable outlook.

Kideco's overburden removal activities were halted on June 28 after an accident that resulted in a casualty, Fitch said. The cause of the incident is currently being investigated and it remains unclear when overburden removal will resume again, the agency said.

Indika's management said that all other mining activities are still ongoing, the agency said, and that Kideco has roughly about one-month of stockholding as a buffer against any potential disruption in production activities.

However, Fitch noted that any long term disruption of overburden removal that curtails dividend flows from Kideco to Indika may result in a negative rating action, as Indika's credit profile is supported primarily by the dividend flows.

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