Sulfindo eyes up to $400 mln in stake sale-sources

Sulfindo Adiusaha, an Indonesian chemical producer, aims to raise up to $400 million by selling up to a 40 percent stake to a strategic partner to pay maturing debts, three sources with knowledge of the deal said.

Sulfindo is raising money via a stake sale after it did not issue a five-year fixed rate dollar bond in January because of weak investor interest, said two of the sources, who declined to be identified because the deal was not public.

"The company has no choice left given it has a highly leveraged financial profile," one of sources familiar with the deal told Reuters. "They aim to raise between $250 million to $400 million by selling a 30 to 40 percent stake."

Sulfindo did not respond to Reuters queries seeking comment.

Macquarie has been appointed as the financial advisor for the plan, the sources said. Macquarie declined to comment.

Standard & Poor's on May 16 downgraded Sulfindo's credit rating to CCC from B-, saying it faced a prolonged delay in obtaining sufficient external financing.

"We believe Sulfindo has weak sources of liquidity to cover its needs in the next nine months. We expect the company's liquidity sources of about $135 million to be barely sufficient to cover our estimate of its liquidity needs of $125 million over the next nine months," the report said.

The firm is controlled by the Victoria Group, which is owned by Indonesia's Tanojo family, who also owns small lender Bank Victoria and brokerage Victoria Securities.

Sulfindo produces caustic soda, chlorine, ethylene dichloride, vinyl chloride and polyvinyl chloride (PVC), products used in the pulp and paper industry, water treatment and for pipes, according to the company's website. Source: Reuters