Mar 29, 2011

Moody's may upgrade Davomas rating

Moody's Investors Service has today placed PT Davomas Abadi Tbk's (Davomas) Caa3 corporate family rating on review for possible upgrade.
"The potential acquisition of 51.9% stake in Davomas by PT Uniflora Prima ((P)B2/stable) and the planned full redemption of Davomas' senior secured notes due 2011 and 2014 are positive for the rating," said Ken Chan, a Moody's Vice President, in a press statement obtained by Bisnis today.
According to Chan, the successful completion of the potential transaction should materially improve Davomas credit profile.
"Moreover, Davomas has been gradually ramping up its production lines since the middle of last year, subsequent to the production halt in the financial crisis."
In its review, Moody's will focus on the eventual capital structure of Davomas post-completion of the transaction, and the sustainability of its operating performance.

Disclosure: No position at the stock mentioned above.  

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