Polaris

Polaris: (S$0.015) Potential default of 44.9% owned Trikomsel may wipe out its equity
Polaris' 44.9% owned PT Trikomsel Oke has disclosed that the company may not be able to meet its financial obligations indefinitely, following the general slowdown in the Indonesian economy and the depreciation in the rupiah.

The ailing company is an Indonesia-based mobile-phone distributor and retailer.

The company previously issued $115m worth of three-year corporate bonds in May '13 at 5.25%, and is now seeking to discuss with bondholders on possible restructuring options.

Credit rating agency S&P has cited that the potential default of Trikomsel would be a rare event that has not occurred in Singapore's corporate bond market since the global financial crisis.

As of 31 Dec '14, Polaris recorded a book value of $318.5m for its investment in Trikomsel, which makes up a whopping 94% of the group's entire equity value of $338.6m.

If Trikomsel fails to restructure its debts, Polaris may potentially see a massive wipeout of its book value.