Mitra Investindo to finance acquisition of Benakat Oil via internal funds

By Romel S. Gurky

IDX-listed PT Mitra Investindo Tbk said that it has decided to cancel a planned rights issue to raise funds to finance the acquisition of 23.4 percent shares in PT Benakat Oil.

The company said in a statement Tuesday that it would instead use internal funds to finance the acquisition. ?Therefore, the planned rights issue is discontinued,? the company said.

Mitra failed last month to obtain shareholders? approval for the rights issue.

Mitra signed a conditional sale and purchase agreement on May 20 of this year with PT Pratama Media Abadi (PMA) and PT Benakat Oil (BO) for the acquisition by Mitra of 23.44 percent of the issued and paid-up share capital of BO and translates into an indirect holding of 21.79 percent of PT Benakat Barat Petroleum (BBP).

BBP is a limited liability company incorporated under the laws of Indonesia. Pursuant to an operations cooperation agreement (the Benakat Barat KSO) entered into between BBP and PT Pertamina EP on March 16, 2009, BBP holds an undivided 100 percent interest in the Benakat Barat KSO and has the rights and obligations to exploit, develop and explore for hydrocarbons in the Benakat Barat field in South Sumatra.

Mitra said that oil and gas business will become its main sole of revenue as the company has sold its granite concession on Bintan Island, a process that is also expected to be completed this year.

Mitra currently owns the Linda Sele oil and gas field, in West Papua, following the acquisition of 90 percent shares of Goldwater LS Pte Ltd from Interra Resources Ltd in 2014. Last year, sales volume from the concession stood at 6,669 barrels. Production from Linda Sele is expected to increase this year.

Editing by Reiner Simanjuntak