Medco to issue Rp 1.2t bond later this year

Medco to issue Rp 1.2t bond later this year

Dow Jones, Jakarta

Indonesian oil and gas company PT Medco Energi Internasional said on Monday its plan to issue bonds in the local market later this year.

The company said in a preliminary prospectus that it will issue up to Rp 1.2 trillion (US$129 million) of five-year bonds that will carry a fixed coupon to be decided later. The size is less than the Rp 1.8 trillion reported by a local newspaper earlier this month.

The company named PT Mandiri Sekuritas, PT Indo Premier Securities and PT UOB Kay Hian Securities as co-lead underwriters for the issue.

Medco said it will use the proceeds to expand its business, to repay debts and to boost working capital. It didn't elaborate on these plans.

It is unclear whether the proceeds of the issue would play a part in Medco's takeover bid for Australia's Novus Petroleum. Bankers involved in the bond deal suggested the latest offering would go ahead regardless of whether Medco is successful in its bid for Novus.

Medco earlier this month raised its cash offer for Novus to A$1.90 a share from A$1.74. The new bid values Novus around A$350.3 million. Medco Chief Executive Hilmi Panigoro said at the time that the Indonesian firm had secured the financing package required to fully fund the revised offer.