Medco plans rights issue, bonds this year
Medco plans rights issue, bonds this year
Dow Jones, Jakarta
Oil and gas producer PT Medco Energi Internasional said on Tuesday said it planned to issue rights shares to increase its capital and to reduce its debt to equity ratio.
"If it is possible, we will issue the new shares later this year," Medco President Hilmi Panigoro told reporters.
He didn't provide other details, but said the company plans to reduce its debt-to-equity ratio to less than 1.0 from 1.75.
Analysts say Medco's leverage increased after it issued $250 million in seven-year bonds May. The company also plans to issue Rp 1.2 trillion (US$128 million) of 5-year bonds to expand its business.
Medco finance director Sugiharto said the company has adequate funds to take over Australia's Novus Petroleum Ltd.
Medco has $170 million in internal cash and has secured $120 million of syndicated loans arranged by Singapore's United Overseas Bank Ltd. and Oversea-Chinese Banking Corp. to take over the Australian company, he added.
"We have sufficient funds to take over Novus which is worth $249.5 million," he said.
Medco is in a bidding war for Novus after it made an initial offer for 100 percent of the company in December.
Medco last week increased its cash takeover offer for Novus to A$1.90 a share from A$1.74.
Medco's Sugiharto expects 2004 net profit to fall 36 percent to $34 million from $53 million in 2003 due to a drop in oil production and an increase in interest expenses.
Revenue this year is expected to decline to $454 million from $463 million.
The acquisition of Novus is expected to help improve the company's oil production and financial performance, he added. He didn't elaborate.
The firm also said on Tuesday that it will set a fixed coupon of between 12.25 percent and 13.5 percent for its proposed Rp 1.2 trillion bond.
It will start bookbuilding for the five-year bond Wednesday and close it June 18 and list the bond on the Surabaya Stock Exchange July 9.
It named PT Mandiri Sekuritas, PT Indo Premier Securities and PT UOB Kay Hian Securities as co-lead underwriters for the issue.