Indonesia's Medco strikes $122M deal to raise funds

Medco Power sold a 51 percent stake to Saratoga Capital to help fund its plan to quadruple its power generating ability in the next four years.

The deal, which leaves 49 percent of the company with Medco Energi, Indonesia’s biggest listed oil producer, was worth $112 million. Saratoga , a private equity firm controlled by Edwin Soeryadjaya and Sandiaga Uno, is paying for the stake in two stages.

An installment of $87 million has been paid while the remaining $25 million will be paid next month.

“Medco Power is currently in a growth phase and in need of a strategic partner to grow faster,” said Medco Energi’s president director, Lukman Mahfoedz. “After a year of evaluating potential candidates, we found Saratoga to be the most suitable partner.”

Fazil Alfitri, president director of Medco Power, said the company was aiming to quadruple its power generation ability, to 1,000 megawatts, by 2015 and needed an injection of capital to finance projects currently in the pipeline.

To reach the 1,000 MW target, the company will spend as much as $600 million in capital expenditure by 2015, of which $200 million will be spent next year.

Medco Power will finance the expenditure from a combination of its own equity and loans from local banks including Bank Mandiri and Bank CIMB Niaga, Fazil said.

The company has also acquired stakes in other power projects, he said, including a geothermal power plant in Sarulla, North Sumatra, with a capacity of 330 megawatts.

For the source of this story, click here.