Panigoro family to acquire Medco shares

Leony Aurora, The Jakarta Post/Jakarta

The Panigoro family plans to buy a 59.9 percent stake in publicly listed oil and gas firm PT Medco Energi International and once again become the majority shareholder after founding the company 25 years ago.

The acquisition will cost US$400 million, Medco's president director Hilmi Panigoro said after attending a session at the IndoGas conference here on Thursday.

The family will buy shares mainly from Thai upstream oil and gas firm PTT Exploration and Production and from Credit Suisse First Boston, the subsidiaries of New Links Energy Resources, which controls 86 percent of Medco, said Hilmi.

At present, the Panigoro family owns Encore Limited -- a 40 percent shareholder of New Links.

Funding is likely to come from family funds, while the sales agreement is expected to be completed before the second week of February, he added.

Medco, the largest Indonesian-controlled private oil company with $1.42 billion in assets, was founded by business tycoon- turned-politician Arifin Panigoro.

Singapore's state investment company Temasek Holdings Pte in December announced that it had scrapped talks to buy a 38.4 percent stake in Medco after the Panigoro family said it would exercise the right to match Temasek's offer for the stake.

Elsewhere, Medco intends to buy two oil sites among the 61 offered by the government in the country this year, and another two in the Middle East, said Hilmi.

He did not elaborate.

The company reported a 7 percent rise in its third quarter net profit in 2004 to $44.5 million as compared to the same period the previous year thanks to a surge in oil prices and additional production from Australian-based Novus Petroleum Ltd., which it acquired last year.

The company's share ended Rp 100 (about 1 U.S. cent) higher at Rp 2,600 on Thursday.