Medco secures loans to finance Novus acquisition

PT Medco International Tbk has secured bridging loans worth US$120 million from a syndication of two foreign banks, UOB Bank and OCBC Bank Singapore to help finance the company?s plan to acquire Australia-based Novus Petroleum, Investor daily reported on Wednesday.

In addition to the bridging loans from the two banks, Medco would also use its own funds worth about US$170 million to finance the acquisition of Novus that would cost the company about A$349.5 million (about US$249.5 million) or A$1.9 per share.

Medco?s finance director, Sugiharto, said in Jakarta on Tuesday that the company would issue bonds worth Rp1.2 trillion (about US$130 million) to repay the bridging loans, which would mature between two and six months.

According to him, the bonds would offer coupons with yields of between 12.25 percent and 13.5 percent a year.

Sugiharto said that Medco had no plan to raise its bid on Novus shares despite the fact that that its rival in the bidding, Sunov, had announced a plan to offer a higher bid.

?We still provide the chance to Novus shareholders to unconditionally receive our price offer,? he said. (*)