Fitch lowers Lippo Karawaci

Fitch Ratings said it downgraded Lippo Karawaci's national long-term ratings and assigned a negative outlook.

The ratings include the issuer default rating and senior unsecured rating, both lowered to CCC+ from B.

All ratings were removed from rating watch negative, on which they were placed on May 3.

“The downgrades follow significant weakening of Lippo's property-development cash flow owing to sustained poor demand for the company's products due to its focus on mid- to high-end customers and weak execution of some projects that has delayed completion and could diminish the strength of Lippo's brand,” Fitch said in a news release.

“This, in our view, has been potentially exacerbated by bribery allegations and an investigation into corruption related to Lippo's 27%-owned associate company, PT Mahkota Sentosa Utama, by the Indonesian authorities.”

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