PEFINDO affirms ratings of J Resources

(May 6, 2023)--PEFINDO has affirmed its idBBB+ ratings to PT J Resources Asia Pasifik Tbk (PSAB), Shelf-Registered Bond I and MTN I. The outlook for the corporate rating was also affirmed at “CreditWatch with Negative Implication”. PSAB has received the bondholders’ approval to extend the maturity of Shelf Registered Bond I Phase IV Year 2020 to May 6, 2026, from initially May 6, 2023. The outlook for the corporate rating was also affirmed at “CreditWatch with Negative Implication” as the Company still needs to resolve the maturing Shelf Registered Bond I Phase I Year 2019 due on June 5, 2023 which if the repayment is made, will be using internal cash and/or loan facilities from third party.

The corporate rating reflects PSAB’s sizeable mining reserves and resources, expectations of low cash cost from new project, and the high demand for gold. The rating is constrained by its aggressive capital structure, exposure to the fluctuation of gold prices, and risks related to the development of new mines.

PSAB’s inability to address its maturing bonds in a timely manner may trigger rating downgrades. The outlook may be revised to stable should the Company is able to successfully secure the funds to fully repay the maturing bonds.

PSAB was established in 2002 under the name PT Pelita Sejahtera Abadi and commenced mining operations in 2012 after acquiring assets from Avocet Mining. Its operations cover the exploration, mining, and processing of gold. It has a geographically diverse portfolio of assets across Indonesia (Seruyung in North Kalimantan; and Bakan, Lanut, and Doup in North Sulawesi) and Malaysia (Penjom).

The Company owned two producing mines and one mine in construction stage. As of December 31, 2022, its shareholders consisted of Jimmy Budiarto (92.50%), Sanjaya J (0.02%), and the public (7.48%). (ends)