Medco seeks to settle acquisitions in June
Medco seeks to settle acquisitions in June
Rendi A. Witular, Jakarta
Publicly listed energy firm PT Medco Internasional said it
expected to conclude deals to acquire Australian-based energy
firm Novus Petroleum and two local gas working areas in June at a
total cost of at least US$400 million.
Medco chief financial officer (CFO) Sugiharto said Medco would
try to counter a takeover bid for Novus by Australian-based Sunov
Petroleum Pty soon and was expecting to end the bidding process
in June.
"If we want to win the bid, we should at least offer the same
biding rate and conditions as Sunov... But if we fail, we still
have two other acquisitions in the pipeline," Sugiharto said at a
seminar on Friday.
Medco earlier offered to buy 90 percent of Novus shares on
issue at A$1.74 each and has extended its bid for the seventh
time to May 25, without increasing its offer.
Meanwhile, Sunov has raised its bid to A$341 million (around
US$250 million), or A$1.85 per share, up from A$326 million, or
the A$1.77 a share of its earlier bid.
Medco, which was founded by businessman-turned-politician
Arifin Panigoro, was anxious to acquire Novus, which has a major
gas field in Brantas, East Java, as part of its business strategy
to shift its focus from oil to gas. Medco has seen a decline in
its oil reserve lately.
Sugiharto said the company would also conclude the buying of
other two gas blocks in June. He refused to disclose the name of
the blocks.
Energy analysts from several securities firms have speculated
that Medco is planning to obtain some shares in the Kangean oil
and gas block in East Java from energy firm BP Indonesia, a local
unit of the British-American energy giant.
The company is also reportedly trying to obtain a gas block in
Senoro, central Sulawesi.
Sugiharto declined to comment on the plan.
He only said the areas the company was eying had already
earned contracts with several buyers to supply gas.
"We are not going to acquire a block that needs to be
developed from scratch," he said.
In other matters, Sugiharto said the company would start the
operation of its 55 megawatt (MW) gas-fueled power plant in Batam
in August and start upgrading its capacity to 85 MW next year.
The company will need to invest $50 million in the plant, with
$20 million of the amount allocated for an upgrade.
Sugiharto said 30 percent of the funds would be taken from the
company's internal cash, while the remaining 70 percent would be
in the form of loans, convertible into equity, from Bank Central
Asia.
The gas for the plant will be supplied from state gas producer
PT Perusahaan Gas Negara.