Indonesian oil and gas company PT Medco Energi Internasional Tbk (MEDC) has announced plans to offer 3 billion new shares or about 47.7 per cent of the total paid up capital to raise Rp4.6 trillion ($340 million). Details on pricing or the entitlement of the rights have not been disclosed.
The management of Medco explained that 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.
“Shareholders who don’t exercise their rights in this offering will see their ownership diluted up to 48 per cent maximum,” said the management in an official statement to the Indonesian Stock Exchange (IDX).
If everything goes according to plan, Medco will ask for an approval from shareholders on June 29 and will be able to submit a notification to the Financial Services Authority (OJK) on July 29.
$146m bond issue
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.
Medco is owned and controlled by tycoon Arifin Panigoro, who recently announced that he will purchase 76 per cent stakes in gold miner Newmont Nusa Tenggara (NNT) in a deal that could reach $2 billion, one of the country’s largest takeovers for the year.
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.
US-based Newmont Mining owns 31.5 per cent of its Indonesian operations as of September last year, with the remaining stake held by Japanese trading house Sumitomo Corporation and Indonesia’s debt-ridden Bakrie Group.