Medco seeks $150 million loan from ABN Amro

PT Medco Energi Indonesia is exploring the possibility of obtaining US$150 million loan from ABN Amro to partly finance the company?s plan to acquire new oil fields and to expand exploration activities in the existing oil wells, Koran Tempo reported on Friday.

Medco?s finance director Sugiharto said in Jakarta on Thursday that the total funds which would be needed for the company?s expansion and acquisition plan would reach about Rp 2.7 trillion (about US$300 million).

According to him, a number of options will be considered to raise funds for the expansion and acquisition plan including in the form of bank loans (structure financing), project financing scheme, issuing eurobonds or yankee bonds in the United States.

"We might consider the combination of structure finance, eurobond and project financing scheme," he was quoted as saying.

Vice President of ABN Amro Edi Sukarno confirmed that Medco Energi had proposed an application to raise loan from the bank but he denied that the oil company and the bank had signed a memorandum of understanding on the loan proposal.

"We need one or two months to process the application," he added, but Edi was reluctant to unveil the amount of the loan that could be provided by the bank.

Meanwhile Sugiharto said that ABN Amron was one of banks that would be asked to provide loans to Medco. "We are seeking terms and condition that would not cause a heavy burden on us," he added. (*)