PT Medco Energi Internasional Tbk (MEDC)Â is planning to launch medium term notes (MTN) of US$100 million next year.
Oil and gas company, which is controlled by Panigoro family, will use proceeds from MTN to prop up debt refinancing, investment, and working capital. "The proposed MTN has been rated AA- by PT Pemeringkat Efek Indonesia," said a press release submitted today.
The ratings reflect MEDC’s relatively competitive lifting cost and above average liquidity. The ratings are constrained by weakening financial performance, decreasing production from limited producing fields, delay in several major projects, and more aggressive financial leverage resulting from sizeable capital expenditure.
A negative outlook is assigned to Medco's rating to anticipate the company's worse than expected financial performance. These include further negative impact from fluctuating oil and gas prices, lower oil and gas production and delays in its major projects.
Medco is the largest privately-owned independent oil and gas company in Indonesia, with the latest estimated proven crude oil reserves of 64 million barrel oil equivalent and natural gas of 25 mmboe from fields located in Sumatra, Kalimantan, Sulawesi, East Java, and United States. Around 50.7% of Medco is owned by Encore Energy Pte. Ltd and public holds 37.6% and 11.7% of treasury shares. Encore Energy is owned by Panigoro family through Encore International (60.6%), and Mitsubishi Corp. (39.4%).
