Medco plans dual listing, IPO for subsidiaries
Tuesday, June 12 2001 - 01:37 AM WIB
Medco Energy president John Karamoy said the dual listing of Medco shares would likely be pursued in two out of three major overseas stock markets - London, New York or Sydney stock exchanges.
The dual listing aimed to improve the value of the company and also improve trading liquidity of Medco shares.
"We hope to be able to pursue the dual-listing and the initial public offering (IPO) of subsidiaries' shares at the last quarter of this year or the first quarter of 2002," Karamoy said at the company's public expose on Monday.
Medco Energy's finance director Sugiharto said that the dual listing of Medco shares aimed especially to improve the value of the company's shares.
He contended that Medco booked a staggering increase of 300 percent in the growth of its revenue and oil reserves, but stock prices did not follow through such a sharp increase.
Medco Energy's total sales reached Rp 3.12 trillion in 2000 (US$ = 11, 250) , almost double from the Rp 1.63 trillion booked in 1999. This sharp increase in sales resulted in the company's soaring net profit to Rp 572 billion last year, almost three times the profit of Rp 176 billion recorded in the previous year.
"This phenomenal growth of performance is not followed by phenomenal growth of share prices," Sugiharto said.
Nevertheless, Sugiharto said the dual listing of the company's shares would be pursued whenever the situation allowed the company to do so.
He added that three factors would determine whether the company should proceed with the dual listing. They are sizing, timing and pricing. What the company could influence was only the sizing by conducting acquisitions of new oil fields. As for timing and pricing would very much depend on market situation.
"Therefore, this dual listing would only be possible to be materialized in year 2002," he said.
In a bid to strengthen Medco stock prices, the company has also allocated Rp 264 billion of fund to buyback its shares from the market. But Sugiharto dismissed speculation that the buyback program was part of a strategy from the majority shareholder, Credit Suisse First Boston, to cash its ownership at Medco.
In addition, Medco Energy was also preparing three subsidiaries for an IPO on local stock exchanges. They are PT Exspan Petrogas Indonesia, PT Medco Antareja and PT Apexindo - all operating in oil and gas exploration activities.
Nevertheless, Sugiharto said domestic market situation was not yet conducive for an IPO, and therefore, those three subsidiaries would be first of all merged with foreign entities so that they would be ready to compete with similar companies in the international market. (*)