Medco to use proceeds to finance ongoing projects

Ika Krismantari , The Jakarta Post , Jakarta | Wed, 06/11/2008 10:37 AM | Business

The country's second largest oil producer, PT Medco Energi Internasional, plans to use the proceeds secured from the sale of its stake in subsidiary PT Apexindo Pratama Duta to finance ongoing projects.

Medco newly-appointed president director Darmoyo Doyoatmojo said the company would use the total proceeds of US$340 million to finance projects, including the construction of the Senoro Liquefied Natural Gas (LNG) plant in Central Sulawesi (and mining project) Blok A in Nanggroe Aceh Darussalam.

"There is also the Sarulla geothermal project in West Java, and block expansions in Lematang and Libya," Darmoyo said.

He said of the lump sum, 20 percent was in the form of secured bonds of a one-year maturity period.

The bonds were issued by Singapore-based Sabre System International, a subsidiary of local trucking company PT Mitra Rajasa.

Mitra sealed a deal to buy an 80.6 percent stake of Apexindo at a price of Rp 2,450 (26 U.S. cents) a share.

Before the sale, Apexindo was 48.87 percent owned by Medco, 31.7 percent by Encore International Ltd, and the remainder by the Panigoro family and the public.

The Panigoro family owns the majority stake in Medco.

Bloomberg reported Apexindo's share climbed to a year high of Rp 2,200 on Monday, or a 62 percent rise from its year low of Rp 1,360 in March, on news Medco was selling its stake in the unit. The shares were suspended from trading today.

Mitra settled to a 2.5 percent increase to Rp 810 per share in Jakarta trading yesterday after reaching as high as a 20 percent gain on the same day.

Medco fell 3.6 percent to Rp 5,400, while the country's benchmark index declined 0.3 percent.

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