JAKARTA: Indonesian credit rating agency Pemeringkat Efek Indonesia downgraded the ratings of PT Bakrie Telecom and its bond I/2007 due in 2012 from "idA-" to "idBBB+". The outlook of the rating is "stable".Niken Indriarsih and Vonny Widjaja, analysts at PT Pemeringkat Efek Indonesia (Pefindo), in a press release published today, said that the ratings change is driven by the company's weakened cash flow protection and profitability as its new business has not generated profit to compensate the larger debt burden.The ratings reflect the company's strong market position in Greater Jakarta, Banten and West Java, relatively well business diversification and relatively good infrastructure and quality of service.However, the ratings are constrained by the company's weak cash flow protection, declining profitability and aggressive capital structure.Bakrie Telecom provides wireless telecommunication services under the "Esia" brand. As of March 31, 2011, the company covered 82 cities in Indonesia, supported by 3,992 base transceiver stations. As of March 31, 2011, the company is owned by PT Bakrie & Brothers Tbk (21%) and the rest of the shares are owned by public.The BTEL-code stock declined 1.39% or IDR5 to IDR355 at the Jakarta Stock Exchange as of 11.37 a.m. local time. (NOM)
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