Medco Energi Internasional Tbk (MEDC) will increase its capital through the issuance of new shares with rights issue of 4.45 billion shares. The company will also issue 4.45 billion warrants as an incentive for rights issue holders so that the total new issued shares will reach 8.9 billion shares. The proceeds are estimated to reach USD 150 million.
The management said in the prospectus that this will potentially lead to ownership dilution of 25.22 percent. The proceeds will be used to pay part or all of the debt that will mature. Meanwhile, funds obtained from the exercise of warrants will be used for the company’s and its subsidiaries working capital and buy back part or all of rupiah bonds that have passed the period which were agreed by bondholders.
Based on the financial statements as of March 2017, the company has liabilities that will mature within one year in the form of bank loans of USD 185.03 million, USD 262.51 million in rupiah bonds and USD 17.85 million in US dollar bonds. MEDC will conduct an Extraordinary General Meeting of Shareholders (EGMS) on November 2, 2017 to obtain approval for the corporate action.
On Tuesday (26/9), MEDC dropped 3.4 percent to IDR 850. (*)