Indonesia: Medco Energi to acquire Newmont in $2.6b deal

Image of gold ore. Credit: Flickr/James St. John

In one of the largest structured finance deals in southeast Asia this year, PT Medco Energi Internasional Tbk (MEDC) has agreed to acquire a controlling stake in PT Amman Mineral Internasional, which owns 82.2 per cent of copper and gold mine PT Newmont Nusa Tenggara, for a consideration of Rp 34 trillion ($2.6 billion).

The energy company, controlled by Arifin Panigoro, has teamed up with Agus Projosasmito’s AP Investment to purchase the stakes. The duo is being supported by Indonesia’s three largest state-owned banks – Bank Mandiri, BNI, and BRI.

President Director of Medco Energi Hilmi Panigoro said, the transaction structure is “sophisticated” and “rare” by Indonesian banking practice.

“The structure that the banks applied in this transaction is expected to bring more similar and equally important transactions in the future,” he said in a statement today.

Panigoro went on to say that the transaction will strengthen Indonesia’s premier independent energy and natural resources company. It will immediately impact Medco Energi’s performance given Newmont’s global scale of operations.

NNT is the owner and developer of Batu Hijau mining asset in Sumbawa island, West Nusa Tenggara province, the second largest copper and gold mine in Indonesia after Freeport McMoran‘s Grasberg asset.

Medco’s statement did not disclose who it bought the remaining stake from.

Amman Mineral Internasional had bought 56 percent of Newmont from a joint venture between U.S. miner Newmont Mining Corp and Japan’s Sumitomo Corp. It had also bought 24 per cent from PT Multi Daerah Bersaing, which is owned by Indonesia’s PT Bumi Resources Minerals Tbk (BRMS) and local governments, according to a recent announcement.

Meanwhile, PT Pukuafu Indah still holds 17.8 percent and PT Indonesia Masbaga Investama owns 2.2 percent.

Bonds, rights issue

The company is also planning to offer 3 billion new shares of about 47.7 per cent of the total paid up capital to raise Rp 4.6 trillion ($340 million). about 70 per cent ($238 million) of the funds raised, will be used for debt repayments, and 30 per cent ($120 million) for capital expenditure including assets acquisitions.

At the same time, the firm is planning for a bond issuance worth Rp2 trillion ($146 million). Proceeds of the bond will also be used for expansion and debt repayment. To assist the deal, Medco has appointed Mandiri Sekuritas as one of the bookrunners.

Also Read:

Indonesia: O&G co Medco plans $340m rights issue, $146m bond issue

Newmont’s stake in Indonesia’s mining subsidiary to be bought out by Medco founder, partners

Indonesia Dealbook: Medco buys Jakarta office tower for $167m; Pertamina to invest $5.31b in 2016

Medco Energi acquires Lundin Indonesia assets for $22m

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.