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Fitch: MPM Finance's Merger Plan Has No Impact on Rating
April 3, 2014 / 8:17 AM / 3 years ago

Fitch: MPM Finance's Merger Plan Has No Impact on Rating

(The following statement was released by the rating agency) JAKARTA/TAIPEI/SINGAPORE, April 03 (Fitch) Fitch Ratings says the proposed merger between PT Mitra Pinasthika Mustika Finance (MPM Finance) and PT Sasana Artha Finance (SAF) will not affect MPM Finance's National Long-Term rating at 'A-(idn)'/Stable. This reflects Fitch's expectation of continued support from MPM Finance's parent - PT Mitra Pinasthika Mustika (MPM; 'A(idn)'/Stable). MPM Finance is a multi-finance company whose main focus is in used car financing, while SAF is focused on motorcycle financing. The latter is 60% owned by MPM and 40% by JACCS Co., Ltd., a Japan-based financing company whose core business is in consumer credit (credit card and consumer financing). JACCS plans to inject IDR 510bn into MPM Finance - giving it 40% of MPM Finance's equity after the merger. MPM will retain majority ownership with a 60% stake in MPM Finance. The merger is part of MPM's strategy to strengthen its position in the consumer automotive business, providing greater economies of scale, cost efficiency, streamlined business monitoring, business synergy, and product diversification. The merged entity will be known as MPM Finance once the transaction is completed, and will continue to be a strategically important subsidiary of MPM, despite a decline of its shareholding to 60% from 100%. Fitch believes MPF Finance's operations would be supported by MPM's well-established automotive distribution business. JACCS will be actively involved in the operation and management of MPM Finance including the appointment of key executives. Access to JACCS' technical and funding support will benefit MPM Finance's standalone credit profile over time. Fitch will reassess the support-driven rating of MPM Finance as the ownership structure evolves with the potential source of support from JACCS in addition to the continuous support from MPM. . Contacts: Primary Analyst Stefanus Yuniardhi Associate Director PT Fitch Ratings Indonesia DBS Bank Tower 24th Floor, Suite 2403 Jl. Prof. Dr. Satrio Kav 3-5 Jakarta, Indonesia 12940 +62 21 2988 6809 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(idn)' for National ratings in Indonesia. Specific letter grades are not therefore internationally comparable. Additional information is available at www.fitchratings.com. Applicable criteria, "Global Financial Institutions Rating Criteria", dated 15 August 2012, "Rating FI Subsidiaries and Holding Companies", dated 10 August 2012, and "National Scale Ratings Criteria", dated 30 October 2013, are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria -- Effective Aug. 15, 2012 to Jan. 31, 2014 here Rating FI Subsidiaries and Holding Companies here Finance and Leasing Companies Criteria - Effective Dec. 12, 2011 to Dec. 11, 2012 here National Scale Ratings Criteria here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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