Energy integrated company PT Indika Energy Tbk (INDY) is estimated to obtain US$144.9 million dividend from its coal unit PT Kideco Jaya Agung for the full year of 2010.
In a press statement from Fitch Ratings obtained by Insider Stories today the amount of dividends received by Indika, which is currently holding 46% stake in Kideco, Indonesia's third largest thermal coal producer, is likely to remain strong given increasing coal production by Kideco and expected robust coal prices.
In the last 3 years, Kideco has distributed more than 90% of its net income, more than the minimum 80% set out in the shareholders' agreement.
For FY10, Kideco declared USD315 million of dividends, which were nearly 100% of Kideco's net income. Kideco's ability to upstream dividends is supported by its moderate capex, its low production cash costs as well as its debt-free status.
In addition, Fitch has assigned Indo Energy Finance B.V.'s proposed 2018 US$ notes-guaranteed by Indika and certain subsidiaries-an expected rating of B+(exp) with a Recovery Rating of 'RR4'.
The company expects to raise up to US$135 million from the proposed 2018 notes on top of its offer to exchange the proposed notes with the existing US$ notes falling due in 2012.
Disclosure: No position at the stock mentioned above.
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