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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                     A S I A   P A C I F I C

          Thursday, December 23, 2021, Vol. 24, No. 250

                           Headlines



A U S T R A L I A

KEY SERVICES: Second Creditors' Meeting Set for Dec. 31
PACIFIC STEEL: First Creditors' Meeting Set for Jan. 4


C H I N A

RISESUN REAL: Majority of Creditors Support Debt-Swap Offer


I N D I A

EVEREST INTERNATIONAL: Insolvency Resolution Process Case Summary
FASHION FLARE: Insolvency Resolution Process Case Summary
JSB ENTRADE PRIVATE: Insolvency Resolution Process Case Summary
KAAKATEEYA FABS PRIVATE: Insolvency Resolution Case Summary
PEBBLE GLOSSY: Insolvency Resolution Process Case Summary

RAJKHAM INFRA PRIVATE: Insolvency Resolution Process Case Summary
RENEW POWER: Fitch Alters Outlook on USD585MM Sec. Notes to Stable
RETAIL KART: Insolvency Resolution Process Case Summary
SARAVANA STORES: Insolvency Resolution Process Case Summary
VENUS CONTROLS: Insolvency Resolution Process Case Summary



I N D O N E S I A

MEDCO ENERGI: S&P Affirms 'B+' LT ICR on Acquisition Announcement

                           - - - - -


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A U S T R A L I A
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KEY SERVICES: Second Creditors' Meeting Set for Dec. 31
-------------------------------------------------------
A second meeting of creditors in the proceedings of Key Services
Payroll Pty Ltd has been set for Dec. 31, 2021, at 11:00 a.m. via
virtual meeting technology.

The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.

Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Dec. 30, 2021, at 5:00 p.m.

Daniel Frisken of O'Brien Palmer was appointed as administrator of
Key Services on Nov. 25, 2021.

PACIFIC STEEL: First Creditors' Meeting Set for Jan. 4
------------------------------------------------------
A first meeting of the creditors in the proceedings of:

    - Pacific Steel Constructions Pty Limited;
    - Maxim Steel Pty Ltd;
    - Boom Lift Pty Ltd;
    - Sydney Management Pty Ltd;
    - Equipment Plus Pty Limited;
    - PSC Property Management Pty Limited; and
    - PRB Fabrication Pty Ltd

will be held on Jan. 4, 2022, at 3:00 p.m. via teleconference.

Neil Cussen and Andre Lakomy of Cor Cordis were appointed as
administrators of Pacific Steel on Dec. 20, 2021.



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C H I N A
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RISESUN REAL: Majority of Creditors Support Debt-Swap Offer
-----------------------------------------------------------
Bloomberg News reports that RiseSun Real Estate Development Co.
said most creditors have given a positive response so far to its
offer to swap two dollar bonds, as the cash-strapped developer
seeks more time to repay debt.

A majority of holders have provided verbal consent to its proposal
to exchange the bonds maturing next year for new notes with longer
durations, RiseSun said in response to questions from Bloomberg,
without giving specific figures. Investors holding less than 10% of
the notes have indicated opposition to the plan, the company said.

RiseSun last week proposed to swap the two bonds maturing in
January and April -- totaling about $780 million -- for new
securities that wouldn’t come due until 2023 and 2024, Bloomberg
recalls. The swap requires acceptance from at least 85% of holders,
RiseSun said in an exchange filing last week. Holders have until
Dec. 30 to accept the offer, and will receive extra cash if they
agree by Friday [Dec. 24], Bloomberg relays.

According to Bloomberg, RiseSun is among a handful of Chinese
developers scrambling to delay their offshore debt repayments after
soaring yields during a leverage crackdown made it too expensive to
refinance debt. Kaisa Group Holdings Ltd. defaulted this month
after bondholders rejected its exchange offer, while a Yango Group
Co. unit successfully swapped three dollar notes in November,
Bloomberg relays.

Based in the northern province of Hebei, RiseSun ranked 22nd by
sales nationwide last year, according to China Real Estate
Information Corp.

RiseSun would sell assets worth about CNY5.4 billion ($847 million)
as of June to fund repayment of the new bonds, including its listed
property management unit Roiserv Lifestyle Services Co. and nine
commercial properties, the company, as cited by Bloomberg, said. If
creditors accept the proposal, it would kick off the disposals
after the Lunar New Year holiday and seek to complete them within
six to nine months, the company added.  

Bloomberg notes that a successful dollar debt extension is critical
for RiseSun, which said it only has about CNY700 million of
unrestricted cash on hand. That’s not enough to cover more than
CNY5 billion of payments to suppliers and salaries for migrant
workers before the Chinese new year starting Feb. 1, which the
company said it needs to prioritize. The firm has a further
CNY15 billion in cash that’s tied up or under supervision, it
said.  

China Evergrande Group, the developer at the center of the property
industry cash crunch, is also making payment of such bills a
priority as regulators urge it to head off any risk of social
unrest, Bloomberg reported last week.

Meanwhile, RiseSun is talking to financial institutions on
extending borrowings of about CNY20 billion due in the first half
of next year, the company said, Bloomberg reports.

Bloomberg relates that RiseSun’s parent company is considering a
potential sale of a unit that makes electric-vehicle batteries, and
is seeking as much as CNY10 billion, people familiar with the
situation said this week.

RiseSun hired Haitong International Securities Group Ltd. as a
financial adviser on its debt situation, the developer said last
week before announcing the bond-exchange proposal, Bloomberg
discloses.

Risesun Real Estate Development Co Ltd is principally engaged in
the real estate development and sales. Urban real estate business
includes several series, namely Flower Language, Beautiful
Splendid, Grand View, and Mansion House. Travel business focuses on
the four major industries of tourism, vacation, health, and
pension. Industrial park business layouts several industrial cities
and industrial parks in the domestic market. Property business
provides owners with new retail, bag check-in, community canteens,
real estate brokers, community resources, community media and other
whole-life service chain products. It is also engaged in the
financial services business. The Company mainly operates its
business in the domestic market.



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I N D I A
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EVEREST INTERNATIONAL: Insolvency Resolution Process Case Summary
-----------------------------------------------------------------
Debtor: Everest International Private Limited
        45 Udyog Bhavan
        Sonawala Road
        Goregaon East
        Mumbai, MH 400063
        IN

Insolvency Commencement Date: November 26, 2021

Court: National Company Law Tribunal, Mumbai Bench

Estimated date of closure of
insolvency resolution process: May 30, 2022
                               (180 days from commencement)

Insolvency professional: Mr. Hemant Kumar Shah

Interim Resolution
Professional:            Mr. Hemant Kumar Shah
                         Flat No. 401
                         Ambika Heights CHS Ltd
                         Plot 30-A, Sector 25
                         P.O. Nerul
                         Near Sea Woods Rly Station (East)
                         Navi Mumbai, Maharashtra 400706
                         E-mail: shahkhemant@yahoo.com

                            - and -

                         AAA Insolvency Professionals LLP
                         A301, BSEL, Teck Park, Sector-30 A
                         Opposite Vashi Railway Station
                         Vashi, Mumbai City
                         Maharashtra 400705
                         E-mail: everestinternational@
                                 aaainsolvency.com
                                 hemantshah@aaainsolvency.com
                         Tel: 022-42667394

Last date for
submission of claims:    December 15, 2021


FASHION FLARE: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Fashion Flare International Private Limited

        Registered office & Unit-1:
        A-189, Okhla Industrial Area
        Phase I, New Delhi
        Delhi 110020

        Unit-2:
        C-48, Hosiery Complex
        Phase-II, Noida 210305 (UP)

Insolvency Commencement Date: December 10, 2021

Court: National Company Law Tribunal, Bench-III, New Delhi

Estimated date of closure of
insolvency resolution process: June 8, 2022
                               (180 days from commencement)

Insolvency professional: Mukesh Chand Jain

Interim Resolution
Professional:            Mukesh Chand Jain
                         F-703, Munirka Apartments
                         Sector-9, Plot-11
                         Dwarka, New Delhi 110075
                         E-mail: mcjain.jmca@gmail.com

                            - and -

                         Immaculate Resolution Professionals
                         Private Limited
                         Unit No. 111, First Floor, Tower-A
                         Spazedge Commercial Complex
                         Sector-47, Sohna Road
                         Gurgaon 122018
                         E-mail: cirp.fashionflare@gmail.com

Last date for
submission of claims:    December 24, 2021


JSB ENTRADE PRIVATE: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: JSB Entrade Private Limited
        H.No. 31, F A Road
        Kumarpara
        Guwahati 781009
        Assam, India

Insolvency Commencement Date: December 10, 2021

Court: National Company Law Tribunal, Guwahati Bench

Estimated date of closure of
insolvency resolution process: June 8, 2022

Insolvency professional: Manish Agarwalla

Interim Resolution
Professional:            Manish Agarwalla
                         Room No. 9, 5th Floor
                         Parmeshari Building
                         Chatribari
                         Guwahati 781001
                         Assam
                         E-mail: camanishagarwalla@gmail.com
                                 cirp.jsbentrade@gmail.com

Last date for
submission of claims:    December 28, 2021


KAAKATEEYA FABS PRIVATE: Insolvency Resolution Case Summary
-----------------------------------------------------------
Debtor: Kaakateeya Fabs Private Limited
        D.No. 8-52/1/2, Old CBI Down
        China Waltair, Visakhapatnam
        AP 530017
        IN

Insolvency Commencement Date: December 14, 2021

Court: National Company Law Tribunal, Hyderabad Bench

Estimated date of closure of
insolvency resolution process: June 12, 2022

Insolvency professional: Anubolu Kuladeep

Interim Resolution
Professional:            Anubolu Kuladeep
                         C-406, SRI Kalki Heights
                         Manjeera Pipeline Road
                         Madinaguda, Hyderabad 500049
                         E-mail: ip.anubolu@gmail.com

                            - and -

                         Sankalp Restructuring Private Limited
                         Unit-113, 1st Floor
                         Manjeera Trinity Corporate
                         KPHB Phase-3
                         Hyderabad, TG 500072
                         IN
                         E-mail: ip.kaakateeya@gmail.com

Last date for
submission of claims:    December 30, 2021


PEBBLE GLOSSY: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Pebble Glossy Metals Private Limited
        H.No. B-923, Ground Floor, B-Block
        Gharoli Dairy Farm
        Mayur Vihar Phase-3
        Delhi 110096

Insolvency Commencement Date: November 30, 2021

Court: National Company Law Tribunal, Delhi Bench

Estimated date of closure of
insolvency resolution process: May 29, 2022

Insolvency professional: Mr. Ashish Singh

Interim Resolution
Professional:            Mr. Ashish Singh
                         Flat No. 901, Tower A-3
                         Cleo County, Sector-121
                         Noida, Uttar Pradesh 201301
                         E-mail: ashishsinghcs@gmail.com

                            - and -

                         Unit No. 14, Ground Floor
                         Tower-A, The Corenthum
                         Noida, U.P. 201301
                         E-mail: pgmpl.ip@gmail.com

Last date for
submission of claims:    December 21, 2021


RAJKHAM INFRA PRIVATE: Insolvency Resolution Process Case Summary
-----------------------------------------------------------------
Debtor: M/s. Rajkham Infra Private Limited
        New No. 105, Arcot Road
        Kodambakkam
        Chennai 600024
        Tamilnadu

Insolvency Commencement Date: December 3, 2021

Court: National Company Law Tribunal, Chennai Bench

Estimated date of closure of
insolvency resolution process: May 31, 2022

Insolvency professional: Seetha Thelagar

Interim Resolution
Professional:            Seetha Thelagar
                         11-13, Muthumariamman Koil Street
                         Janaki Nagar Annexe
                         Valasaravakkam
                         Chennai 600087
                         E-mail: tseetha2002@gmail.com
                                 irprajkhaminfra2021@gmail.com
                         Mobile: 9840899329
                                 7010566630

Last date for
submission of claims:    December 25, 2021


RENEW POWER: Fitch Alters Outlook on USD585MM Sec. Notes to Stable
------------------------------------------------------------------
Fitch Ratings has revised the Outlook on India Green Energy
Holdings' (IGEH) USD325 million senior secured notes due 2024 and
ReNew Power Restricted Group 4's (ReNew RG4) USD585 million senior
secured notes due 2028 to Stable from Positive. The ratings on the
bonds are affirmed at 'BB-'.

RATING RATIONALE

The rating action follows the revision of the Outlook of ReNew
Power Private Limited's (ReNew Power) 'BB-' Issuer Default Rating
(IDR) to Stable from Positive on 13 December 2021. The ratings on
IGEH's notes are capped by that of ReNew Power, while the ratings
on ReNew RG4's US dollar bonds are supported by a full-tenor
guarantee from ReNew Power.

ReNew Power's Outlook revision to Stable reflects a slower pace of
deleveraging than Fitch previously expected, due to larger capex
than the agency forecast and a slower improvement in receivables.
Fitch previously expected ReNew Power's capex to be below the
company's estimates given the continuing challenges from the
Covid-19 pandemic, including delays in signing new power-purchase
agreements.

KEY RATING DRIVERS

IGEH: Prior to the maturity of IGEH's notes, ReNew Power will repay
the initial parent-guarantor loan, which IGEH will use to partially
redeem the US-dollar notes, while refinancing the outstanding
amount. Fitch's rating case assumes that IGEH will not be able to
fully amortise its refinanced debt over the refinancing period if
ReNew Power does not repay the initial parent-guarantor loan. This
would result in an event of default. As such, the note rating
relies on ReNew Power's credit quality. Fitch assesses IGEH's
underlying credit profile with orphan issuance risk at 'bb'.

ReNew RG4: The rating on ReNew RG4's notes reflects the credit
strengths and weaknesses of a restricted group of operating
entities supported by a full-tenor unconditional guarantee from the
parent, ReNew Power. The restricted group will need to tap the
parent's access to funding to refinance its US dollar bonds.

Please see the following rating action commentaries for the full
rating rationale and disclosures for IGEH and ReNew RG4:

-- Fitch Affirms India Green Energy Holdings' Notes at 'BB-';
    Outlook Positive, published 9 November 2021

-- Fitch Rates ReNew Power Restricted Group 4's USD585 Million
    Notes Final 'BB-'; Outlook Positive, published 2 June 2021

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative
rating action/downgrade:
IGEH:

-- A downgrade of ReNew Power's IDR.

ReNew RG4:

-- A downgrade of ReNew Power's IDR to below 'BB-'.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:
IGEH:

-- An upgrade of ReNew Power's IDR.

ReNew RG4:

-- An upgrade of ReNew Power's IDR to above 'BB-'.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

IGEH's and ReNew RG4's ratings are linked with those of ReNew
Power.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.

RETAIL KART: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Retail Kart Solution Pvt. Ltd.
        P-222-Kh-43/12 Raj Nagar II
        Palam Colony
        New Delhi 110077

Insolvency Commencement Date: October 12, 2021

Court: National Company Law Tribunal, Delhi Bench

Estimated date of closure of
insolvency resolution process: 180 days from commencement

Insolvency professional: Praveen Kumar Agrawal

Interim Resolution
Professional:            Praveen Kumar Agrawal
                         D-306, Ashiana The Heritage
                         Sector 4 Vaishali
                         Ghaziabad 201010
                         E-mail: pravag3001@gmail.com

                            - and -

                         906, Tower A, I-Thum Business Park
                         Opp. Noida Electronic City
                         Metro Rail Station
                         Noida 201301
                         E-mail: praveen.agrawal@synergyipe.com
                         Tel: 0120-4126027
                         Mobile: 9720108105

Last date for
submission of claims:    October 26, 2021


SARAVANA STORES: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Saravana Stores Gold Palace Private Limited
        No. 2, Old Mahabalipuram Road
        Rajiv Gandhi Nagar
        Sholinganallur, Chennai
        Kancheepuram, TN 600119
        IN

Insolvency Commencement Date: October 4, 2021

Court: National Company Law Tribunal, Chennai Bench

Estimated date of closure of
insolvency resolution process: April 3, 2022
                               (180 days from commencement)

Insolvency professional: Narayanan Srinivasan

Interim Resolution
Professional:            Narayanan Srinivasan
                         No. 65A and 65B
                         Bhavani Street
                         S Kulathur
                         Chennai 600117
                         E-mail: naarayansrinivas@gmail.com
                         Mobile: 9840608098

Last date for
submission of claims:    October 19, 2021


VENUS CONTROLS: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Venus Controls & Switchgear Private Limited
        32, Ezra Street
        North Side Police Station
        Hare Street
        Kolkata 700001
        WB

Insolvency Commencement Date: November 25, 2021

Court: National Company Law Tribunal, Kolkata Bench-I

Estimated date of closure of
insolvency resolution process: May 24, 2022
                               (180 days from commencement)

Insolvency professional: Mr. Aditya Vikram Varma

Interim Resolution
Professional:            Mr. Aditya Vikram Varma
                         6B, Neelamber Building
                         28 B Shakespeare Sarani
                         Kolkata 700017
                         WB
                         E-mail: adityavikramvarma@yahoo.co.in
                                 cirp.venuscontrol@gmail.com

Last date for
submission of claims:    December 18, 2021




=================
I N D O N E S I A
=================

MEDCO ENERGI: S&P Affirms 'B+' LT ICR on Acquisition Announcement
-----------------------------------------------------------------
S&P Global Ratings affirmed the 'B+' long-term issuer credit rating
on PT Medco Energi Internasional Tbk., and its 'B+' issue ratings
on Medco's guaranteed senior unsecured notes.

The negative outlook reflects the potential for a downgrade if
Medco's operating performance and cash flow leverage fails to
improve to levels consistent with a 'B+' rating, with the ratio of
funds from operations (FFO) to debt remaining below 12%.

S&P said, "We expect Medco Energi's production scale and cost
position to strengthen upon the acquisition of ConocoPhillips
Indonesia Holdings Ltd. (CIHL). Medco expects the deal to close in
the first quarter of 2022.

"Our rating affirmation reflects our view that Medco's production
profile and cost position will likely strengthen following the
acquisition and integration of CIHL's gas-heavy producing assets.
We believe successful integration of CIHL's onshore oil and gas
assets from the Corridor Block Production Sharing Contract (PSC)
will be key to Medco consolidating its financial position to be in
line with our expectations for the 'B+' ratings. This is because
the debt-funded acquisition of CIHL could coincide with a period of
weak earnings performance. Medco's existing business has yet to
fully recover from weaker market conditions during the COVID-19
pandemic.

"We expect the acquisition of CIHL will improve Medco's production
scale and cost position.Medco expects to close its US$1.35 billion
acquisition of CIHL by March 2022, subject to receiving shareholder
approvals, and meeting certain conditions. Medco is on track to
satisfy the acquisition conditions, in our view. Following the
transaction close, the effective date for the deal will be
backdated to Jan. 1, 2021. At the same time, Medco will take over
operatorship of the Corridor PSC, in which CIHL has a 54% working
interest.

"We anticipate that CIHL will add 50 thousand barrels of oil
equivalent (kboe) per day–60 kboe/d to Medco's existing
production of 98 kboe/d–103 kboe/d over 2022-2023. Thereafter, we
estimate consolidated production at 140 kboe/d-150 kboe/d due to a
decline in CIHL's working interest in the Corridor PSC to 46%,
prior to the local government's entry in 2024."

The integration of CIHL's assets will likely improve Medco's unit
cost position. Medco's portfolio will benefit from Corridor's lower
cash cost of US$4/boe–US$5/boe, which compares favorably to
Medco's current cash cost of US$9/boe–US$10/boe and is
attributable to economies of scale from the large reservoirs and
high productivity across the nine producing fields (seven gas and
two oil fields) within the Corridor PSC.

CIHL's gas-heavy assets will increase Medco's proportion of gas
production post transaction-close to 70%-75% from 60% on the
company's current asset base. CIHL's gas sales are underpinned by
long-term offtake contracts to high-quality counterparties such as
Temasek Holdings Ltd.'s wholly owned subsidiary Gas Supply Pte.
Ltd. (GSPL), PT Perusahaan Gas Negara Tbk. (PGN), and PT Pertamina
(Persero). Long-term fixed price contracts with embedded price
escalations will support earnings visibility.

S&P said, "Post-acquisition, we anticipate that Medco's total fixed
gas price contracts will generate at least US$650 million per annum
over 2022-2023, while increasing Medco's portfolio weighting to
fixed-price gas to 56% (compared with about 35% pre-acquisition).
Given that the bulk of gas sales agreements under Corridor PSC will
expire in 2023, we expect Medco to extend and renew the agreements
ahead of 2023 with broadly similar terms."

Medco's proved and probable (2P) reserves life will shorten to
seven years following the CIHL acquisition, increasing the need for
reserves replacement. S&P said, "While the acquisition of Corridor
PSC increases Medco's scale and adds low-cost assets to its
portfolio, we believe the acquisition of a mature, late-stage asset
will require additional investment in the coming years to address
the relatively short reserve life. On a pro-forma basis, we
estimate Medco's proved (1P) reserve life will shorten to about
five years as of the end of 2021, based on current production
levels."

S&P said, "In our view, the 2P reserve life of about seven years as
of the end of 2021 on a pro forma basis (compared with 10 years in
2020) heightens the need for Medco to invest in order to extend its
reserve life and offset the natural depletion of its mature assets.
However, we note that the economic life of the Corridor PSC based
on 2P reserves could extend up to nine years, given the expected
natural decline in Corridor PSC's production profile in the coming
years. Medco's five-year average all-in 2P reserves replacement
ratio was 1.2x in 2020.

"In our view, the 63% debt-funded acquisition highlights the
capital intensity of Medco's growth strategy, and a dependency upon
capital markets funding.Despite the strong earnings accretion from
CIHL, we believe the net increase in gross debt as a result of the
acquisition increases the sensitivity of Medco's credit ratios to a
pricing downcycle. The acquisition will add US$850 million in gross
debt to Medco's capital structure, comprising a US$400 million bond
raised in November and a US$450 million two-year amortizing bank
loan. The company will make up the remaining US$505 million with
internal cash, cash generated at the asset level, as well as fresh
equity.

"We do not preemptively incorporate equity fundraising proceeds in
our projections, given the uncertainty around the timing of such
receipts. We also do not explicitly incorporate US$82 million of
net cash proceeds Medco expects from the sale of an 8% stake in PT
Amman Mineral Internasional to PT Sumber Mineral Citra Nusantara
(SMCN) by the end of 2021. Such cash proceeds, when materialized,
could further bolster Medco's cash position.

"In our view, the amortizing loan will help reduce the acquisition
debt over the next two years. However, the company's funding
concentration toward bonds limits its ability to utilize
discretionary cash to repay debt. We project Medco's average annual
tax and interest payments to be between US$600 million and US$650
million over 2022-2023, based on the company's capital structure
and earnings profile after the acquisition. We believe this
concentration in bonds could make Medco susceptible to market and
investor sentiment.

"In our view, integration risks could become more pronounced, given
the operating weakness in Medco's existing operations.Given the
acquired asset is 60%-70% of Medco's current production profile, we
believe any missteps in integrating the Corridor PSC assets could
place further pressure on the 'B+' rating. Moreover, the uneven
economic recovery from the pandemic exposes the company to
prospects of tepid gas demand persisting in 2022. Integration
risks, while mitigated by Medco's knowledge of the area surrounding
Corridor PSC, may also give rise to one-time costs, lease
liabilities, asset retirement obligations, and the asset's
underperformance relative to our expectations.

"Assuming a seamless integration of the CIHL assets and recovering
gas demand in Indonesia and Singapore, we forecast Medco's
FFO-to-debt ratio could improve toward 13%-15% in 2022. This is
because we anticipate CIHL would add US$425 million–US$475
million in EBITDA to Medco's expected US$700 million–US$750
million EBITDA (inclusive of the power segment) in 2022. In our
view, the expected earnings accretion from CIHL can accommodate the
elevated capital expenditure (capex) levels and would support an
average annual free operating cash flow of up to US$100 million.

"We anticipate Medco's capital spending will rise in order to
develop and define new reserves. We revised upwards our expectation
for Medco's capital spending for its oil and gas business by US$100
million to about US$300 million annually across 2022-2024. In our
view, this could be sufficient to stabilize the company's reserve
life following the acquisition, depending on the success of its
organic projects. Coupled with capital needs for Medco's power
business, we estimate average annual capex at about US$350
million.

"The negative rating outlook on Medco reflects the risk of
integrating its acquisition of CIHL, while at the same time
attempting to turn around the weaker operating performance on
Medco's current asset base, and delivering sustained financial
metrics consistent with our 'B+' rating."

S&P would lower the rating if Medco's FFO-to-debt ratio fails to
improve above 12% on a sustained basis. Given the company's shorter
reserve life after the acquisition, such a scenario could occur
if:

-- Hydrocarbon prices fall materially below our expectation;

-- Medco faces difficulties in integrating CIHL assets seamlessly;
or

-- Medco undertakes further debt-funded acquisitions, with no
marked strengthening of its reserve life.

S&P could also lower the rating if it observes a weakening in the
company's transparency or governance practices.

S&P could revise the rating outlook on Medco back to stable with
increased visibility on asset integration, such that it expects the
company's FFO-to-debt ratio to improve and sustain above 12%, even
after considering future capital spending plans. Such a scenario
could materialize upon the successful integration of CIHL, such
that Medco consolidates its production rate at 150 kboe/d-160
kboe/d.


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S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.

Copyright 2021.  All rights reserved.  ISSN: 1520-9482.

This material is copyrighted and any commercial use, resale or
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