Moody's: No change for Bakrie Sumatera

Moody's Investors Service said it already considered the aggressive growth strategy of Bakrie Sumatera Plantations Tbk into its ratings as the company's announced a Rp 4.97 billion rights issue.

The company has corporate family and secured bond ratings of B3 with a negative outlook.

About 65% of the net proceeds would be used to acquire a downstream oleo chemical facility currently in debt restructuring with creditors, Moody's said, as well as two oil palm plantations and one rubber plantation.

Another 15% of the net proceeds would be used to develop its plantation business and the rest to strengthen working capital, the agency said.

Although the proposed acquisitions are likely to increase cash flow and allow the company to become an integrated player, Moody's said they also involve a number of executions risks, hence the negative outlook.

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