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Indika Energy Downgraded to B+ by Fitch
April 17, 2025
Indika Energy was downgraded by a notch to B+ from BB- by Fitch. The downgrade reflects Fitch’s expectations that Indika’s EBITDA net leverage will remain above 3x in 2025-26, with negative free cash flow during this period due to high capex for the Awak Mas gold project. It also reflects execution risk on its gold mining project, which has been delayed. The execution of the Awak Mas project is considered to be crucial for Indika’s deleveraging and diversification. The project is delayed to 2H2026 due to land acquisition issues. Awak Mas is expected to contribute 25% to EBITDA by 2027, with gold reserves of 1.51mn ounces and a mine life of about 15 years. The contribution from Indika’s new businesses, such as electric vehicles and bauxite mining, is expected to remain small over the next few years. Indika plans to form strategic alliances to minimize risks in these new sectors.
Its 8.75% 2029s traded weaker at 90.97, yielding 11.6%.
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