PT Medco Energi International Tbk (IDX:MEDC) issued global bonds US$650 million to acquire British' Ophir Energy Plc - Photo by Ophir Energy

JAKARTA (TheInsiderStories) – An oil and gas producer, PT Medco Energi International Tbk (IDX:MEDC) issued global bonds with total amount US$650 million with coupon rate 7.38 percent. The funds use to finance the acquisition of British’ Ophir Energy Plc., worth of $535.2 million and pay the company’ debt due in 2026, said an official statement today (05/07).

As of Sept. 30, 2018, MedcoEnergi has total debt more than $3.7 billion. Based on the company’ financial statements that the total debt consists of more than $2.6 billion in long-term debt and more than $1 billion in short-term.

Standard Chartered acted as global coordinator for the bond offering helped by lead managers and book-runners such as ANZ, DBS, ING Securities, and PT Mandiri Sekuritas. During the offering period, orders that came the global bond exceeded $2 billion from 154 investor accounts, of which 50 percent were Asian investors, while the remaining were taken by investors from Asia and Europe with each taking 25 percent.

In addition, investment managers and hedge funds have a portion of 87 percent, while 9 percent is the portion of insurance managers and pension funds, and the remaining 4 percent is from the banking sector.

In Ophir’ acquisition planning, MedcoEnergi has made an offer in the official announcement on January 30, 2019 based on the British rule regarding Takeovers and Mergers. The acquisition depends on the approval of Ophir’s shareholders and other authority regulations. The company will acquire 57.5 percent of Ophir’ shares.

The energy producer hoped that with the completion of the Ophir acquisition, the company will strengthen its presence in Southeast Asia. The combination of the businesses. In MedcoEnergi‘ view, will provide a balance of regional asset production and development portfolios, with favorable results for employees, work partners, and host countries, it said.

For the ability to acquire Ophir, several international rating agencies increased their positive ratings on MedcoEnergi’ debt. Fitch Ratings upgraded the rating from B positive outlook to B + and B2 from Moody’s Services Investor.

Similarly, rating agency S&P Global Ratings revised the outlook for MedcoEnergy‘ rating from stable to positive. The rating agency believes that Medco’s cash flows and operating profile are likely to consolidate at a stronger level after Ophir’s acquisition and integration.

Written by Daniel Deha, Email: