Credit Suisse might pull out from Medco Energi

PT Medco Energi Corporation Tbk did not rule out the possibility of Credit Suisse First Boston (CSFB) to pull out from the publicly listed oil company, Jakarta-based business daily Bisnis Indonesia reported on Wednesday.

"Seen from its investment character, it is possible that CSFB will soon pull out from Medco," Medco?s finance Sugiharto said in Jakarta when he was asked by reporters about circulating rumors on the financial company?s plan to quit the oil company.

Sugiharto said that based on experience, CSBF had never became a shareholder of a company for more than five years. "If their task has been completed, it is possible that they will withdraw from Medco," he added.

CSFB became a majority shareholder in Medco Energi several years ago through a debt equity swap. The financial company and the Panigoro family, the founder of Medco, then formed a joint venture New Links Energi, which now controls 86 percent of the oil company?s shares.

According to Medco has received a guarantee from CSBF that the later would not sell its shares to strategic investors. "So if CSFB pulls out, it will be replaced by a strategic investor," he added.

He also said that the company had yet to carry out its plan to buy back its shares from the market due to an increase in share prices. "If the share price continues to increase in line with the company?s performance, there is more reasons to carry out the buyback program," he added.

The company?s shareholders meeting in June approved the company?s proposal to allocate about Rp 264 billion in cash to buy back part of its shares from the public. The decision was made following a continued drop in the share price. (*)