Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Caussa Capital (formerly Antares) T.CAU -- Ignore unavailable to you. Want to Upgrade?

To: bill718 who wrote (2315)	1/21/1998 5:24:00 PM
From: JD	Read Replies (1) \| Respond to of 4718

Freeport downgraded because if Indo uncertainty. "The downgrades reflect the increased likelihood the Government of Indonesia could take steps that could negatively impact business operations in the country. " Wonder if these 'steps' will impact the issuing of future COWs ..... This is not an upbeat piece of news, if true ! biz.yahoo.com ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Wednesday January 21, 2:04 pm Eastern Time Company Press Release SOURCE: Fitch IBCA, Inc. Freeport Copper Senior & Preferred Downgraded To 'BB/B+' By Fitch IBCA - Fitch IBCA Financial Wire - NEW YORK, Jan. 21 /PRNewswire/ -- Freeport-McMoRan Copper & Gold Inc.'s (FCX) senior debt rating is lowered to 'BB' from 'BBB-' and preferred stock to 'B+' from 'BB+' by Fitch IBCA. The action follows Fitch IBCA's downgrade of the Republic of Indonesia's long-term foreign currency rating to 'B+' from 'BB-'. These ratings were placed on RatingWatch with negative implications by Fitch IBCA on Jan. 12, 1998. The downgrades reflect the increased likelihood the Government of Indonesia could take steps that could negatively impact business operations in the country. The ratings remain on RatingWatch with negative implications. Most of FCX's cash flow is derived from its 85.9% direct and indirect ownership of P.T. Freeport Indonesia (PT-FI), which operates one of the world's largest copper and gold mines in the Indonesian province of Irian Jaya. PT-FI conducts its mining operations under a contract of work (COW) with the Indonesian government, which grants the company, among other items, the right to collect its receivables in an account outside of Indonesia, from which it pays its creditors and shareholders. The imposition of exchange controls would not affect the continuation of the COW, which has the effect of law and would require an abrogation of the COW to change this off-shore cash collection ability. If abrogated, the COW provides for arbitration under the rules of the United Nations Commission on International Trade Law. Other mitigants to an abrogation of the COW by the government would include: Indonesia's need to maintain export, dollar-denominated operations, such as PT-FI; the Indonesian government owns 9.36% of PT-FI and receives dollar-denominated cash flow; PT-FI is one of the largest royalty and tax payers in Indonesia; and PT-FI employs 16,000+ Indonesians and is important to government's plan of transmigration from Java to other islands. Freeport-McMoRan Copper & Gold Inc., headquartered in New Orleans, LA., primarily engages in the exploration, mining and processing of copper and gold in Indonesia. The company also smelts and refines copper in Spain. SOURCE: Fitch IBCA, Inc. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ JD