PT Medco Energi Internasional Tbk (MEDC) willacquisition ConocoPhillips Indonesia Holding Ltd with a transaction value of US$3.5 billion or equivalent to Rp19.36 trillion (exchange rate of Rp14,343 per dollar).
Launching the disclosure of information released by the company, Thursday (20/1), the planned transaction is carried out by Medco Energi Global Pte. Ltd (MEG) which is a controlled subsidiary of the company.
The transaction plan is stated in a conditional sale and purchase agreement (conditional sale and purchase agreement), between Phillips International Investments Inc. as the seller with MEG as the buyer, dated December 8, 2021.
The company will seek the approval of shareholders through the Extraordinary General Meeting of Shareholders (EGMS) on February 25, 2022.
Medco explained that the acquisition is part of the company’s business strategy to increase company value and continue to focus on effective integration.
“The company’s production will be 78 percent gas after the acquisition with a larger fixed price gas portfolio,” the information disclosure said as quoted on Thursday (20/1).
Not only that, according to Medco, this acquisition will result in gradual value growth (accretive) and credit positive, as well as a significantly increased scope of synergies.
Furthermore, after the acquisition, Medco revealed that the company would be the main piped gas supplier to Singapore.
Then, the company will also have a scale of operations with off take long term and supported contracts take or pay with counterpart which has high quality from state-owned companies.
In the future, the company will also have cash cost corridor of US$4-5/boe will support the commitment cash cost below US $ 10/boe.
In addition, the company will also have Restricted Group and total debt will increase after the takeover, but the equity contribution of 37 percent and strong cash gains allow leverage to return to pre-acquisition levels in 2023-2024.
(mrh/bir)
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