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Fitch downgrades Tower Bersama
Fitch Ratings said it downgraded PT Tower Bersama Infrastructure Tbk.'s long-term foreign- and local-currency issuer default ratings to BB- from BB.
The agency also said it affirmed the company’s national long-term rating at AA-(idn).
The outlook is stable.
The downgrades reflect a view of the continued weakness in free cash flow generation due to the company’s aggressive shareholder return policy and high finance costs and capital expenditure needs, Fitch said.
The agency also said it expects Tower Bersama to fund its free cash flow deficit with debt over the next three years.
The company plans to spend up to Rp 1 trillion on dividends and share buybacks in 2016, Fitch said, and refreshed its share buyback program in October to repurchase shares up to a maximum of Rp 1.5 trillion over the next 18 months.
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