Medco gets $300m via secondary offering

Leony Aurora, The Jakarta Post/Jakarta

PT Medco Energi Internasional, the country's largest private, locally controlled oil and gas firm, has raised some US$300 million with its divestment of more than a billion shares at discounted prices, prompting a fall in its market price.

The offering included some 899 million common shares, which were sold at Rp 2,850 (29 U.S. cents) per share -- 25 percent lower than the closing price of Rp 3,775 on Thursday -- the company said in an emailed statement on Friday.

The rest of the stocks, amounting to almost 135 million common shares, were offered as global depositary shares (GDS) at $14.50 each.

One GDS is equivalent to 50 common shares.

The common shares are listed on the Jakarta Stock Exchange, and the GDSs, when issued, are expected to be listed and traded in Luxembourg, the statement said.

Through the secondary offering, founding family Panigoro's shareholdings were reduced to 54.5 percent from the previous 85.5 percent. The oil and gas firm's free float shares, which can be traded by the public, were raised to 38 percent from 5 percent before the divestment.

Merril Lynch International and Credit Suisse First Boston (CSFB) assisted the offering as joint global coordinators and bookrunners.

Medco's share price took a nosedive after the pricing announcement to Rp 3,200 on Friday, 15.2 percent lower than the closing price the previous day -- the biggest loss in six years, according to Bloomberg data.

Earlier this year, the Panigoro family returned as the majority shareholder in Medco when it bought a 60 percent stake in New Links Energy Resources, which then controlled 86 percent of the company.

The founding family purchased the shares for about $340 million from Thailand's PTT Exploration & Production Pcl. and CSFB.

Medco reported an audited net income of $19.9 million in the first quarter of the year, slightly lower than the $20.1 million booked in the same period last year, due to higher costs and taxes.

Rising oil prices boosted Medco's net revenues by 18 percent in the three months ending March 31 to $130.5 million from $110.6 million in the corresponding period the previous year.