Medco receives approval to issue bond

The board of commissioners of publicly listed oil company PT Medco International Tbk has formally approved the company?s plan to float bonds worth between US$100 million to US$150 million in one of the United States stock exchanges, Bisnis Indonesia reported on Thursday.

"The bond offering has been approved by commissioners but we still wait its documentation process to launch the bond," said Gamala Katoppo, the head of corporate research and information section of the company.

The bond has received B+ rating from corporate rating agency Standard and Poors, with a stable outlook.

Medco?s chief financial officer Sugiharto said recently that the company had cancelled its plan to carry out road shows in the world?s major financial centers following the U.S. led attacks against Iraq. He also said that the seven-year bonds would be only issued after the war ended to ensure that the bonds, which would be floated in the U.S. stock exchange, would receive a positive response from the public.

The funds to be raised from the bond issuance would be used to back up the company?s expansion plan which would include acquisition of several oil and gas fields in the country. The expansion plan is estimated to absorb funds amounting to about US$300 million or equivalent to about Rp 2.7 trillion. (*)