PEFINDO assigns idA+ rating to Merdeka's bonds 

(December 7, 2022)--PEFINDO has assigned its idA+ rating to PT Merdeka Copper Gold Tbk (MDKA)’s proposed Shelf Registered Bond IV Year 2022 of maximum IDR15 trillion. At the same time, PEFINDO has affirmed its “idA+” ratings to MDKA and its Shelf Registered Bond I, Shelf Registered Bond II, and Shelf Registered Bond III. Outlook for the corporate rating is stable.

The corporate rating reflects MDKA’s vertically integrated operations in the near term, more diverse business, and sizeable reserves and resources. The rating is constrained by its moderate financial policy and capital structure and exposure to fluctuating commodity prices.

The rating may be raised if MDKA successfully operates its new projects and generates higher revenue than projected which followed by maintaining its profit margins which will improve MDKA’s financial figures on a sustained basis. The rating may be lowered if MDKA generates lower revenue and/or profit margins than projected due to underperformed new projects, aggressively finances its capital expenditure with substantial debt, which may trigger a more aggressive capital structure. A significant deterioration of the commodity prices, particularly gold, copper, and nickel may also trigger a rating downgrade, as this will adversely affect its financial profile.

MDKA was established in 2012 and is engaged in mining activities. It has several projects located in Tujuh Bukit at Banyuwangi and Pani at Gorontalo for gold mining, Wetar Island, Maluku, for copper mining, Konawe at Southeast Sulawesi for nickel mining, Acid Iron Metal (AIM) project at Indonesia Morowali Industrial Park, and RKEF smelters in Morowali, Central Sulawesi. As of October 31, 2022, its shareholders consisted of PT Saratoga Investama Sedaya Tbk (18.345%), PT Mitra Daya Mustika (12.058%), Garibaldi Thohir (7.358%), PT Suwarna Arta Mandiri (5.588%), ISV SA Brunp & CATL Co., Limited (5.000%), and others, including the public and MDKA’s treasury shares (51.651%). (ends)