Fitch downgrades Sritex

Fitch Ratings said it downgraded PT Sri Rejeki Isman Tbk.'s (Sritex) long-term issuer default rating to C from CCC- and its U.S. dollar notes to C from CCC- with an RR4 recovery rating. Simultaneously, Fitch Ratings Indonesia cut Sritex's national long-term rating to C(idn) from CCC-(idn).

The downgrade follows confirmation Sritex did not meet its April 23 interest payment for $850,000 on its syndicated loan.

“Failure to pay within five business days of the due date will constitute an event of default under the loan documentation. Fitch may downgrade the ratings further to 'restricted default' if no payment is made at the expiration of the five days,” the agency said in a press release.

Negotiations with its syndicated lenders for the $350 million facility are ongoing and the company has a proposed standstill agreement.

However, one supplier petitioned an Indonesian court to place Sritex and certain subsidiaries under a court-supervised debt moratorium.

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