Property developer Laguna enters oil and gas business

Indonesia-listed property developer PT Laguna Cipta Griya Tbk plans (LCGP) to change its core business to oil and gas exploration and production, Kontan business daily reported on Friday.

?We will focus on oil and gas and divest our property business,? LCGP?s president director Alwi Bagir Mulachela said in Jakarta on Thursday. He said that LCGP would cooperate with United States-based oil producer Saga Group in the oil and gas exploration and production activities.

Saga Group would become strategic partner by acquiring a 60 percent stake in LCGP, which would soon issue right shares to accommodate the acquisition, Alwi said, adding that the right issue was expected to raise about US$20 million.

The right issue will be held in April this year. After the right issue, Saga Group will become majority shareholder in LCGP. There will be also a change in the board of directors and commissioners following the right issue.

Alwi said that oil and gas exploration and production activities would be more promising than the current business. In the oil and gas sector, LCGP can earn revenues of about US$1 million a month or $12 million (about Rp 108 billion) a year. For a comparison, LCGP booked yearly total revenues of about Rp 30 billion. (*)