Drilling firm Apexindo to issue convertible bonds

PT Apexindo Pratama, a drilling subsidiary of local oil company PT Medco International, will issue bonds worth up to US$50 million to pave the way for the entry of a new strategic partner into the company, Bisnis Indonesia reported on Thursday.

Agustinus Lomboan, the financial director of the company, said in Jakarta on Wednesday that the issuance of the convertible bonds would be the most appropriate alternative now available in attracting new strategic investors.

Apexindo which is engaged in offshore and onshore oil exploration drilling, listed its shares on the Jakarta Stock Exchange last month following its successful initial public offering. As a newly listed company, Apexindo should wait for several months to enable it to make second issue or rights issue. The issuance of the convertible bonds will therefore be the most possible way for the company to attract new Investors.

Agustinus said that an investor from the Middle East has allocated at least US$50 million to buy 30 percent stake in the oil exploration company. "At present we still calculate the real value of the planned convertible bonds. Is it true if the company?s 30 percent stake will be worth US$50 million," he added.

At present, Apexindo is 77.53% percent owned by Medco, 7.12% by PT Hertech Kharisma, 0.08% by Fadli Ilhamsyah and 11.46% by the public.

Chief financial officer of Medco, Sugiharto, has said that Medco intended to further reduce its ownership in Apexindo to less than 51%. "If it is possible, Medco will become minority stake so that Medco no longer needs to consolidate Apexindo?s balance sheets," he added.(*)