PEFINDO affirms ratings of J Resources, bonds

(January 9, 2023)--PEFINDO has affirmed its idBBB+ ratings to PT J Resources Asia Pasifik Tbk (PSAB), Shelf-Registered Bond I and MTN I, as well as revised the outlook for the corporate rating to “CreditWatch with Negative Implication” from “stable”. The outlook revision follows the Company’s plan to conduct bondholders’ meeting on January 27, 2023 related to its plan to obtain approval to reschedule some of its debt instruments due in 2023. Failure to obtain bondholders’ approval may heighten PSAB’s refinancing and liquidity risks, particularly related to its maturing Shelf-Registered Bond I Phase III Year 2020 of IDR569.65 billion due on February 14, 2023. .

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 heightened refinancing and liquidity risk for the next several weeks may trigger rating downgrades. The outlook may be revised to stable should the Company is able to successfully resolve the issues.

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 September 30, 2022, its shareholders consisted of Jimmy Budiarto (92.50%), Sanjaya J (0.02%), and the public (7.48%). (ends)