JAKARTA (TheInsiderStories) – PT Medco Energi Internasional Tbk, a diversified energy company found by businessman Arifin Panigoro, has raised US$500 million from bonds issue, seven year tenor with a final coupon of 6.75 per cent. The company also claimed the bonds were eight times oversubscribed.
The company will use the bonds proceeds to refinance its matured debts. The bonds issue was second in the last two years. In August last year, Medco issued US$300 million worth of bonds with a final coupon of 8.5 per cent. Thus the current coupon rate was lower than the coupon of bonds issued last year.
Moody’s upgraded its B2 issuer rating outlook for the Company to Positive from Stable while Fitch and Standard & Poor’s reaffirmed their B Stable issuer ratings. The Company intends to use the net proceeds from the bond to repay certain indebtedness.
“The strong demand from bond investors reflects the Company’s record of consistent delivery on its commitments, both our operational performance and deleveraging plans,” Roberto Lorato, CEO of MedcoEnergi, said.
“We have delivered higher than budgeted oil and gas production, sustained our cost efficiency measures and most recently successfully executed a rights issue,” he said
Hilmi Panigoro, the president director of MedcoEnergi, said he was happy with the final outcome of the bond issue, and also the credit rating outlook upgrade which reflects the confidence in the company. “We will continue to deliver on our plans for the benefit of all our stakeholders,” he said.
Moody’s has revised the outlook on Medco and Medco Strait Services Pte. Ltd. to positive from stable. At the same time, Moody’s has assigned a B2 rating to the proposed USD-denominated backed senior unsecured bonds to be issued by Medco Platinum Road Pte. Ltd., a wholly-owned subsidiary of Medco.
Moody’s projections incorporate expectations that Medco’s oil and gas sales volume in 2018 will be maintained at around 80 thousand barrels of oil equivalent per day (excluding service contracts), thereby supporting EBITDA generation of $440-$460 million compared to $294 million in 2016.
Moody’s also expects management to continue to deliver on its deleveraging
plan, such that adjusted net debt declines by around 4 per cent in 2018.
Over the past two years, Medco has been focusing in fund raising. Aside of the issued global bond, the company also received two loan facilities of Rp2 trillion in the first half of last year. The first loan came from PT Indonesia Infrastructure Finance of Rp157.5 billion while the second loan was obtained from PT Bank OCBC NISP Tbk (IDX: OCBC) of $150 million or Rp1.98 trillion.
In the nine months to September, 2017, Medco posted revenues of US$597.5 million, an increase of 52.6 per cent year-on-year due to both higher production and higher commodity prices. Average realized prices were US$49.5 per barrel, an increase of 25.2 per cent year on year and US$5.5 per million British thermal unit (mmbtu) for gas or up 31.9 per cent from a year earlier.
The company booked a net profit of US$164.3 million, compared to previous year’s net loss of US$149.6 million. (*)