JAKARTA (TheInsiderStories) – Publicly listed, PT Medco Energi Internasional Tbk (IDX: MEDC) open to release its two subsidiaries shares through initial public offering (IPO), said the owner recently. The companies are power producer, PT Medco Power Indonesia (MPI) and mining company, PT Amman Mineral Nusa Tenggara (AMNT).
AMNT its expecting to raises US$600 million from the IPO but no further information on MPI’ proceed.
“Still looking for the timing. We explore various options, one through IPO. Its also open through backdoor listings scheme or remain private,” MEDC’ owner Arifin Panigoro told TheInsiderStories after meet President Joko Widodo at State Palace in Jakarta, couple weeks ago.
However, he did not ensure, which companies would use the backdoor listing scheme. The corporate actions, he continued, are likely to take place next year.
Beside the three options, MedcoEnergi also considered to looking partner to work with MPI. Director at the company, Anthony R. Mathias said the company had appointed JP Morgan to run the program.
Its unit, aimed to develop gas to electricity conversion and gas conversion into liquefied natural gas (LNG). He claimed the company have received offers from a number of parties but did not mention the origin of the prospective investor.
Medco Power is the subsidiary of MedcoEnergy with the ownership of 100 percent. Currently, MPI is managing several gases, geothermal and water power plants.
While, the Panigoro’ firm officially controlled 50 percent of PT Amman Mineral Investama shares on Nov. 3, 2016. Indirectly, the unit controller of 82.2 percent of AMNT, which controls Batu Hijau copper and gold mine in the Sumbawa Islands.
MedcoEnergy has completed the Ophir Energy acquisition, therefore Ophir’s performance will begin to consolidate into Medco’s books from early June 2019. Both will synergize in the areas of finance, supply chain, maintenance, and several other aspects.
The synergy is expected to increase efficiency by up to $30 million per year. With this efficiency, the company’ profit is expected to increase this year.
In terms of performance, MedcoEnergy posted an increase in revenue in the first half of 2019 from $571.96 million to$625.55 million. However, the company’ net profit actually dropped from $41.44 million to $27.86 million.
The decline in net profit occurred because the cost of goods sold and other direct costs, which rose from $252.92 million to$278.82 million. Therefore, the company’ revenue will not be able to hoist the first half of 2019.
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