Energi Mega plans private placement to restructure debts

IDX-listed upstream oil and gas firm PT Energi Mega Persada Tbk plans to launch private placement to convert part of its debts into equity in the company.

Energi Mega said in a statement on Monday that it will issue 4.2 billion new shares, or 40.65 percent of its paid in and placed capital, to raise Rp 437 billion in proceeds.

As per June 2017, Energi Mega has total debts of US$857.1 million. Debts to be converted into equity include those owed to Greenwich International Ltd worth $23.3 million, Stallion Investment Pte Ltd ($2.46 million), Ultrapro Ltd ($5.07 million), PT Wira Cipta Perkasa ($666.73 million), and PT Prime Petroservices ($1.37 million).

The company said the debt to equity conversion is an important debt restructuring strategy as its financing capacity to repay debts to the creditors have weakened due to the lingering low oil price environment.

Energi Mega said it also plans to launch a share buyback program.

Editing by Reiner Simanjuntak