(June 25, 2025)--PEFINDO has assigned its idA rating to PT Medco Power Indonesia (MEDP)’s proposed Shelf Registered Bond I Year 2025 of a maximum IDR3.0 trillion, with initial issuance of Phase I of IDR500 billion. The proceeds of the bond will be used to refinance its existing debt and to finance its capital expenditure. At the same time, PEFINDO has affirmed its idA ratings for MEDP and its Bond I Year 2018, and idA(sy) ratings for MEDP’s Sukuk Wakalah I Year 2018, Sukuk Wakalah II Year 2019, and its Shelf-Registered Sukuk Wakalah I Year 2022. Outlook for the corporate rating is stable.
The rating reflects our view on MEDP’s position as a strategically important subsidiary of its controlling parent, PT Medco Energi Internasional Tbk (MEDC, idAA-/Stable). The rating is also supported by MEDP’s stable revenue stream, relatively consistent profit margins, and potential growth opportunities from domestic electricity demand.
However, the rating remains constrained by execution and operational risks associated with its power projects, an aggressive capital structure, and weak cash flow protection metrics.
We may consider a rating upgrade if MEDP demonstrates a material improvement in its capital structure and cash flow protection metrics. This could be achieved through enhanced operational efficiency, additional revenue sources, or a significant deleveraging effort. On the other hand, the rating may be lowered if MEDP incurs additional debt beyond projections or continues to divest its shares on strategic assets, thereby reducing its ability to generate cash flow and weakening its overall business and financial profile. The rating will also be under pressure if we view that MEDP is no longer considered as a strategically important subsidiary of MEDC, as reflected by the material divestment.
MEDP is an independent power producer (IPP) focusing on clean energy power plants, mainly gas, geothermal, and renewable, supplying electricity to the state-owned electricity company, PT Perusahaan Listrik Negara (Persero) (PPLN, idAAA/Stable), especially in the western part of Indonesia. It also provides operation and maintenance (O&M) services, mainly through TJB Power Services. As of December 31, 2024, its shareholders were PT Medco Power Internasional (51.0%) and PT Medco Energi Internasional Tbk (49.0%). (ends)
