CSFB will soon sell its stake in Medco Energy

Credit Suisse First Boston (CSFB) will go ahead with its plan to sell its 16 percent stake in Medco Energi International despite the encouraging results reported by the company during the past several years, Koran Tempo reported on Tuesday.

"CSFB will gradually divest its stake in New Links until 2004. It means that the company will lose its ownership in Medco Energi," Medco Energi?s chief executive Hilmi Panigoro said late last week.

According to Hilmi, as an investment company it is natural for CSFB to sell its stake in New Links, which controls 86 percent of Medco Energi?s share ownership. "Usually as an investment firm, its investment will not last more than five years," said Hilmi, the younger brother of Medco Energi?s chief commissioner Arifin Panigoro.

CSFB owns about 16 percent stake in Medco Energi through its 19 percent ownership in New Links. The Panigoro family and PTTEP Offshore Investment Company Ltd of Thailand own 40 percent and 41 percent in New Links respectively.

PTTEP acquired its 40 percent stake in New Links from SCFB?s subsidiary Cumin Limited for US$225 million in October last year. With the acquisition, the Thai company indirectly owns 34.4 percent in Medco Energi while the Panigoro family has 35.26 percent.

Hilmi said that under the existing agreement, if SCFB plans to sell its stake in New Links it should first offer them to existing shareholders before being offered to other buyers. (*)