Release: MedcoEnergi receives $35m payment from MIRA receivables

(Jakarta, June 8, 2011)--PT Medco Energi Internasiorial Tbk (the Company or MedcoEnergi?) has received payment for the settlement of its receivables arising from the Guaranteed Secured Bonds, issued by Sabre Systems International Pte. Ltd. (?SSI?), as part of the payment from the sale of PT Apexindo Pratarna Duta (?APEX?) shares to PT Mitra International Recources (previously named PT Mitra Rajasa Tbk) (?MIRA?) back in September, 2008. The actual cash payment of US$35,000,000 was received on June 7. 2011 from Northern Edge Investment Ltd., (?NEIL?).

Background
On June 9, 2008, the Company signed an Agreement for the Sale and Purchase of Shares (SPS) with PT Mitra Rajasa Tbk (now PT Mitra International Resources) (?MIRA?) to sell 48,72% of its shares in Apexindo at the price of Rp2,450 per share with a total transaction value of approximately $340.89 million. The transaction was approved by the Extraordinary General Meeting of Shareholders held on August 7, 2008 and effectively completed on 10 September 2008. The total $340.89 million was paid in the following manner:
a. $272 million was paid in cash upon the completion of the transaction in September 2008; and
b. $68.2 million was paid with Guaranteed Secured Bonds issued by SSI, a subsidiary of MIRA. The bonds were due in September 2009, and were presented as part of current assets-other receivables in the 2008 consolidated balance sheet.

Following the payment default by SSI, and the failed and unsuccessful restructuring process, the Company then entered a Guaranteed Secured Bond Sale and Purchase Agreement with NEIL for a consideration of US$35 million in cash payment, which was accomplished on June 7, 2011

As disclosed in the Company?s Financial Statement for the year ended December 31, 2010, the Company has allocated provision on MIRA?s receivables. Therefore with the receivables proceeds received from NEIL, the Company will book other income of around $1 million.

Lukman Mahfoedz, the Chief Executive Officer of Company conveyed: The company?s success in selling its MIRA ?s receivables to NEIL demonstrated the Management?s commitment to ensure that the Company has sound financial position at all times. Although the full amount of receivables were not fully collected, nevertheless the overall cash amount received by the Company on Apexindo divestment still reflects the maximum value, as it is still higher than the second highest bidding price at the time?.

Further Syamsurizal Munaf, the Chief Financial Officer of Company conveyed: ?With the cash proceeds received by the Company, it has additional funds which can be used to further facilitate the company work programs?. (end of release)