Oil and gas producer PT Medco Energi Internasional Tbk (MEDC), controlled by Indonesian tycoon Panigoro family, intends to issue convertible bond (CB) amounting to US$150 million-US$250 million as part of financing need worth US$1.4 billion in the next three years.
Medco has mandated two investment banks Credit Suisse and Deutsche Bank to arrange the convertible bond.
According to Medco's Finance Director Cyril Noerhadi, the company will utilize its treasury stocks of 6.7% stakes or 223.59 million shares as collateral of the convertible bond.
Medco now holds 11.72% stakes or 390.45 million treasury stocks. According to the corporation law No.40/2007, around 223.59 million shares or 6.7% must be used before August 2010.
The company will offer 5% or 166.62 million of its treasury stocks as employee stock option program (ESOP) and management stock option program (MSOP). "The remaining or 6.7% stakes will be used as CB's collateral," Cyril said.
In a bid to develop oil and gas projects such as Donggi-Senoro, Sarulla, Libya oil field, and Block A, Medco needs around US$1.4 billion financing.