Medco may raise $300m from Luxembourg, Jakarta share sales
Medco may raise $300m from Luxembourg, Jakarta share sales
Netty Ismail, Bloomberg, Singapore
PT Medco Energi Internasional, Indonesia's biggest publicly
traded oil producer, plans to raise about US$300 million selling
stock in Luxembourg and Jakarta, 25 percent less than Medco's
founders targeted three months ago.
"The existing shareholders are offering their shares," Gamala
Katoppo, head of investor relations at Jakarta-based Medco, said
today. "Investors can choose between the common shares and the
Luxembourg-listed shares."
Chief Executive Hilmi Panigoro said on April 6 that Medco,
which then planned to list in London or Singapore, might increase
the company's market value to about $1.5 billion by selling about
$400 million of shares. Panigoro said two days ago the amount
raised will depend "on the market reaction." The company will
raise about $300 million, bankers familiar with the plan said
today, asking not to be identified.
Medco, with a current market value of $1.28 billion, is
counting on high oil prices and demand for its shares, which rose
to a record in June, to attract investors to its planned
offering. Crude oil futures touched $62.10 a barrel on July 7,
the highest since trading began in 1983. Oil prices helped boost
Medco's operating profit by 36 percent to $51.8 million in the
first quarter.
"The environment is good, the oil price is high and the
sentiment in Indonesia is quite good," Katoppo said in a
telephone interview today. "We would like to do it as soon as
possible."
Medco's founding family, which is seeking to sell as much as
35 percent of the company to pay debt, will begin promoting the
share sale to investors in Asia, Europe and the U.S. this month,
Katoppo said. The company plans to increase the free float, or
the proportion of shares available for purchase in the market by
investors, to about 40 percent from about five percent.
"It's good for the company to increase its free float,"
Katoppo said.
Shares of Medco closed at 4000 rupiah (41 cents) on June 10,
the highest since the stock started trading on the Jakarta Stock
Exchange in October 1994. The stock is trading at Rp 3775 today,
having almost tripled from a low of Rp 1,275 on July 27, 2004.
The proceeds will be used to pay debt from the Panigoro
family's purchase of a 60 percent stake in New Links Energy
Resources, which controls 86 percent of the oil producer. The
Panigoro family bought the shares from PTT Pcl and Credit Suisse
First Boston in February.
Credit Suisse First Boston, the securities unit of
Switzerland's second-biggest bank, Merrill Lynch & Co., the
world's biggest securities firm, and Singapore-based Overseas
Bank Ltd. are managing the sale.