S&P: Sumber Segara on watch

Standard & Poor's said it placed the B- corporate credit rating on PT Sumber Segara Primadaya on CreditWatch with negative implications.

This comes after sustained delay in attaining anticipated operational standards, resulting in cash flows below the levels required under the debt-repayment arrangements of the company, according to the agency.

While the company's ownership reflects an element of shareholder support, S&P said the arrangement is fraught with uncertainty on its timeliness and predictability, especially given S2P may continue to face near-term operating challenges.

Over the next two to three months, the agency said operating cash flow may fall short of the levels required to service the maturing $50 million debt due in July 2008 under a standby letter of credit facility.

Deviations from expected operating performance are significant and may continue to constrain the overall credit profile of the company, S&P said.

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