CSFB will pull out from Medco next month

Credit Suisse First Boston (CSFB) will divest all of its 40 percent ownership in PT Medco Energi Internasional following the entry of new strategic investor PTT Exploration and Production PCL (PTTEP) of Thailand.

Hilmi Panigoro, the chief executive officer of PT Medco said that the proceeds from the sale of the company?s 40 percent stake worth US$225 million had been used to repay the corporate debt to CSFB.

He hoped that the remaining debt to CSFB could be settled next month. ?CSFB will gradually pullout from Medco, its position will be raplaced by PTTEP,? he said.

CSFB and the Panigoro family through New Links Energy Resources LTD previously controlled 85.44% in Medco Energi following the restructuring of the company?s $260 million debt. But in October, PTTEP bought CSFB shares or about 40 percent held by New Links for $225 million.

According to Hilmi, based on the agreement, the Thai company would be allowed only to increase its ownership to 49 percent as the Panigoro would continue to maintain its position as the majority shareholder in the company.

Earlier the company said that it would issue right shares to finance its $260 million debt. But it was later delayed due to the unfavorable condition in the capital market. (*)