Fitch cuts Geo Energy Resources

Fitch Ratings said it downgraded Geo Energy Resources Ltd.'s long-term issuer default rating to CC from B-. The agency also downgraded the rating on subsidiary Geo Coal International Pte. Ltd.'s outstanding senior unsecured guaranteed notes to CC from B- with a recovery rating of RR4.

“The downgrade reflects our view that a default of some kind appears probable within the next 12 months. Fitch expects Geo's liquidity to fall significantly short of the $190 million principal due on its bond's put date in May 2021 if the put option is triggered in April 2021, and believes timely refinancing is highly unlikely for Geo,” said Fitch in a press release.

The likelihood of acquiring PT Bara Anugrah Sejahtera and PT Banjarsari Pribumi, which could help avoid the put option by meeting reserve requirements, has declined significantly with multiple extensions of the deadline on a conditional sale and purchase agreement with PT Titan Infra Energy, the owner of the mines.

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