Medco Aims to Raise Rp 1.5t in Bond Sale for Acquisitions
Tito Summa Siahaan
Medco Energi Internasional, Indonesia’s only listed oil company, expects to raise Rp 1.5 trillion ($162 million) from the sale of five-year bonds next month.
President director Lukman Mahfoedz said on Wednesday that the proceeds would be used to fund acquisitions.
Medco’s debt sale in June is part of its big plan to raise $450 million in four different currencies this year.
Lukman said the coupon on the five-year bonds would range from 7.75 percent to 8.75 percent. The Jakarta-based company plans to offer the bonds to investors from June 12-14 with a planned listing on June 20.
Lukman said that Medco was eager to acquire several oil and gas fields in the Middle East and North Africa, as well as in Indonesia.
“Through our ongoing project, production will be at 90,000 barrels of oil equivalent per day [boed] by 2015, but it will reach 120,000 boed should our acquisition plans go according to plan,” he added.
Medco’s production currently stands at 80,000 boed, with its oil fields in Oman pumping 20,000 barrels of oil per day.
Syamsurizal Munaf, the company’s finance director, said Medco had room to raise $450 million in new debts before the end of the year.
Medco was carrying $1.3 billion in debt as of December, with $879 million in bank loans and $419 million in bonds. The company has $534.5 million of debt due this year. Net income at Medco rose 2.4 percent to $85.1 million last year while revenue increased 23 percent to $1.14 billion.
Medco is among the companies capitalizing on low borrowing cost in Indonesia amid rising demand by investors for corporate bonds.
The yield of government five-year bonds, the benchmark for the country’s corporate bonds, rose to 5.472 percent on Thursday from 5.435 percent on Wednesday, according to data from the Indonesia Bond Pricing Agency.
Medco was founded by businessman Arifin Panigoro. Shares in Medco have fallen 18 percent this year, closing at Rp 1,960 in Jakarta on Wednesday.