SINGAPORE (July 7, 2011)—Standard & Poor's Ratings Services has placed a credit rating for Indonesian tire maker P.T. Gajah Tunggal Tbk. on its CreditWatch.
S&P put Gajah Tunggal's “B” long-term corporate credit rating on CreditWatch with negative implications after the tire maker paid out a dividend that S&P said could be a covenant breach of its 2009 restructured bonds.
The Indonesian company's liquidity could be weakened significantly by the dividend move, S&P said. Gajah Tunggal is restricted from making dividend payments on its restructured bonds in several circumstances, S&P said.