Indika Energy: Out of coal?

Research evidence excerpt

Indika Energy: Out of coal?

J P M O R G A N Asia Pacific Credit Research

16 July 2026

▼Neutral

Indika Energy Previous: Overweight

INDYIJ

Out of coal? Moody's: B1 Outlook: Stable

Fitch: B+ Outlook: Stable

The above agency ratings are at the corporate level

Bloomberg reported that Indika Energy (Indika) is considering selling its coal unit, Asia Pacific Credit Research

PT Kideco Jaya Agung (Kideco). According to the article, the sale may value AC Aman Aggarwal

Kideco at >US$1bn. The company has not issued any clarification on the news. We (852) 2800-0081

believe that a sale at such a valuation (~5x based on Kideco’s annual EBITDA of aman.aggarwal@jpmchase.com

~US$170-200mn) would be a positive development for creditors, should the sale Soo Chong Lim

go through. Indeed, the bonds have reacted positively to the news and are trading (852) 2800-7387

at high-101 levels. We believe that at these levels, valuations look fair and price in soochong.lim@jpmorgan.com

much of the upside, as we discuss in this note. We take profits on INDYIJ ‘29s J.P. Morgan Securities (Asia Pacific) Limited

(101.9 offer, z+356bps, 7.6% ytw) and move from OW to N on the bonds and on

the issuer.

• We believe that the company may require creditors' consent to dispose

stake in Kideco should its stake drop to below 65% and its consolidated

debt to EBITDA exceeds 4x post the sale. This is also true for syndicated loan

facilities, according to the company’s financial statements, where there are

limitations on Kiseco stake sale if the shareholding is <65% or debt to EBITDA

exceeds 3x. It is worth recalling that the bonds are secured by a pledge of shares

held directly or indirectly by the company in PT Indika Inti Corindo (IIC, the

holding company of Kideco) and Kideco, along with Tripatra E&C, Tripatra