Medco plans to sell claims to affiliated companies worth Rp 781.15 billion

JSX listed oil and gas company PT Medco Energi International Tbk will sell claims to its three affiliated companies totaling Rp 781.15 billion (comprising of local currency worth Rp 67.35 billion and foreign currency worth US$80.61 million or equivalent to Rp 713.8 billion) as part of the oil company?s measure to remove all the bad account receivable from its balance sheet, Koran Tempo reported on Saturday.

The company?s financial director Sugiharto said in Jakarta on Friday that the claims to the third affiliated companies, which were mostly in the form of promissory notes, would be auctioned through an open bidding.

He said that PT Medco Duta owed Rp 35.5 billion in local currency and another US$25.98 (or about Rp 230.05 billion) in foreign currency, PT Medco Intidinamika Rp 30.75 billion in local currency and US$1.67 million (about Rp 14.79 billion) in foreign currency while PT Medco Central Asia Limited Rp 1.1 billion in local currency and US$52.96 million (about Rp 468.96 billion) in foreign currency.

He said that the removal of the bad claims would not affect the overall balance sheet because the company had allocated enough reserves to cope with unpaid claims to third parties.

According to him, the proceeds from the sale of the bad claims would be booked as the company?s revenues and this would significantly bring a positive impact on the company?s future profits. (*)