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A Gallant concern

Loss-making firm's high debt levels and weak cashflow problems likely to persist into 2017

Published Thu, Oct 13, 2016 · 09:50 PM

MAINBOARD-LISTED Indonesian play Gallant Venture, in which Sembcorp Industries holds a 12 per cent stake, is going through a rough patch. And the market shows it.

The latest second-quarter results of the vehicle distributor and Batam-Bintan developer paint the picture of a loss-making firm burdened by substantial debt. Gallant's bonds are trading at yields of 13 to 16 per cent, a signal of some distress.

The company's cashflow problems are likely to persist into 2017 amid a rate hike environment and intense competition in its core car distribution business.

Much of its troubles today can…