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VIVA – The international rating agency Moody's officially improved PGN to Baa2 with a stable outlook. The decision was a positive response to the plan to acquire 51% stake in PT Pertamina Gas (Pertagas) worth Rp16,600 billion over the next 90 days.
The fund, which accounts for one-third of the nominal acquisition, comes from the internal treasury of about 5.53 billion rupiahs, and the remaining two-thirds of bank loans are about 11 billion. , 06 billion rupiahs. The notation also applies to the encoded shares of bond issuers of PGAS. The increase in the rating is calculated after PGN announced its decision to take a 51% stake in Pertagas
"Moody's understands that PGN plans to fund the acquisition of new debt and internal cash as at March 31, 2018 for an amount of 1.19 billion The chairman and senior badyst, Moody's Abhishek Tyagi, quoted his official statement, Monday, July 9, 2018.
Tyagi explained that three factors underlie tend the rating of PGNN debt improved to Baa2 with stable outlook.First, even if a new debt to buy Pertagas shares would hurt the PGN financial matrix, the figures are still safe because they are higher that the tolerance rate of 9-12 percent.
"In recent years, PGN has managed to maintain a steady increase in its revenues despite the adjustment of gas prices and distribution rates set by the government , so l& Emergence of new debt burdens remains safe for PGN ". The PGN gas activity in Indonesia both in the middle and downstream. "The PGN Pipeline will increase by 30% after the acquisition, which will contribute to achieving the profitability of the company's operations and capital expenditures in the future," he explained. .
By the end of the first quarter of 2018, the length of the PGN pipeline was over 7,453 kilometers (km), the equivalent of 80 percent of the total. 100 of the national pipelines. From the infrastructure, PGN distributes natural gas to 196,221 industrial and residential customers.
Meanwhile, the length of the Pertagas-managed pipeline reaches 2,438 km. Thus, with the merger of two companies, PGN controls the infrastructure of pipelines in Indonesia by 96%.
Third, the government supports the future business plan of PGN as a subsidiary of PT Pertamina.
With the transfer of 56.96% of the Series B shares of the government in PGN to Pertamina some time ago, coupled with the continued control of the Dwiwarna PGN Series A shares by the State, a guarantee of any corporate action by PGN in the future. "We believe that the Indonesian government will continue to support PGN to optimize its badets, especially with the control of bi-color stock, so that the government still has a veto to approve a good strategic decision for the company," was -he adds. Baa2's rating with Moody's stable outlook is not only applicable to the financing of the 51% acquisition of Pertagas. However, this includes seeking financing for the acquisition of the remaining 49% of Pertagina shares from Pertamina.
"By maintaining his financial well, grades can be lowered if PGN's finances weaken," he said.
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