JAKARTA (TheInsiderStories) – Oil and gas producer, PT Medco Energi Internasional Tbk (IDX: MEDC) plans to repay Rupiah bonds worth of Rp3.24 trillion (US$223.45 million) before maturing in 2021, said the company on Tuesday (08/11). The funds for the buyback program will be withdrawn from the the issuance of global bonds in January, 2020.
Early of this year, the issuer has issued global bond worth of $650 million through its Singapore-based’ subsidiary, Medco Bell Pte. Ltd. According to president director of the company, Hilmi Panigoro, the issuer aimed to reduce the debt and to strengthen the capital structure.
The five series has potential to repay by MedcoEnergi are Series A of the bond issued in 2017 which has an interest rate of 10.3 percent and mature on March 28, 2021 with values of Rp415 billion. Then, Series A of bond issued in 2018 worth of Rp282.5 billion with an interest rate of 8.75 percent will due on March 29, 2021.
Others are Series B of bond issued in 2016 with an interest rate of 11.3 percent and will matures on July 15, 2021 with total amount of Rp923 billion. Next, Series A issued in 2018 worth of Rp1.15 trillion with an interest of 10 percent and will mature on Sept. 28, 2021.
MedcoEnergi also intends to repay part of Series B issued in 2016 with an interest of 11.3 percent and will mature on Sept. 30, 2021. The bonds have values Rp 701 billion. Beside early repayment, the producer also have preparing to a limited public offering of their shares with total amount $150 million in the third quarter of 2020.
The company has obtained the approval on June 25, 2020. While, the effective statement from the Financial Services Authority is expected to be pocketed on August 12.
MedcoEnergi plans to sell up to 7.5 billion new shares of enlarged and paid up capital of the issuer. The proceeds will be used for the working capital of the company or its subsidiaries.
“Every shareholder who does not exercise his right to subscribe new shares in the Preemptive Rights will be diluted to a maximum of 29.5 percent,” said the management.
Over the past year, MedcoEnergi recorded net sales of $1.44 billion from 2018 of $1.22 billion. The issuer booked a net loss of $13.53 million in 2019 from previous year of net loss of $28.37 million. Panigoro blamed the drop in oil prices on the poor financial results. Its also pushed the company to delay its expansion and several projects to minimize the negative impact of the drop in oil prices.
The company’ existence began with the establishment of PT Meta Epsi Pribumi Drilling Company (MEDCO) which was founded in 1980 and then entered the stock exchange on Dec. 6, 1994. The following year, the company acquired Stanvac Indonesia and entered the downstream business in 1997.
In 2018, MedcoEnergi entered Yemen by acquiring Blocks 82 and 83 and in 2010 obtained operatorship in Libya and made three findings, such as a 20-year contract extension for the South & Central Sumatra Block, Block A, and Bawean Block in Indonesia.
In 2014, the producer acquired eight oil and gas working areas in Tunisia, through the acquisition of Storm Venture International (Barbados) Ltd. Last year, the company completed the sale of several non-core assets, including Tunisia, Mexico Block 5, and monetized the shareholder loan of miner, PT Amman Mineral Nusa Tenggara.
Currently, the issuer shares are hold by PT Medco Daya Abadi 50.01 percent, Diamond Bridge Pte Ltd 21.38 percent, PT Medco Duta 0.19 percent, PT Multidfabrindo 0.04 percent, and public investors 27.98 percent.
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