Pertamina May Fail on Medco Acquisition

State oil and gas PT Pertamina had announced its plan to indirectly acquire shares of PT Medco Energi Internasional Tbk. However, Commission VII of the House of Representatives (DPR) stated that the future corporate act will be disapproved.

"Pertamina President Director Karen Agustiawan must account for the political background [of the act]," said a lawmakers from Commission VII, Dewi Aryani Hilman, in Jakarta today, Nov 25.

According to Dewi, Pertamina's acquisition over Encore International, which owns Medco shares, will only bother the company. "Pertamina may have a number of analysts. However, many would say no to the plan," he said.

Another lawmaker from Commission VII, Satya W Yudha, said the acquisition fund can in fact be allocated to improve the company's performance.

Menanggapi penolakan Komisi VII DPR, Direktur Pertamina, Ferederick ST Siahaan, menegaskan bahwa Pertamina sampai saat ini belum mengambil keputusan mengenai jadi tidaknya akuisisi saham Encore tersebut.

"Up until today, the board of directors have not yet decided whether or not to buy Medco," said Ferederick.

Earlier, Pertamina was reported of planning on acquiring Medco. However, Encore offered a chance to Pertamina carry out due dilligence over the company.

Pertamina has so far signed principles of agreement with Encore International Limited to take over some shares of Encore Energy Pte Ltd (Medco's ultimate shareholder).

If the agreement is approved, Pertamina would own 27.9 percent of Medco Energi Internasional shares.

Despite the disapproval, the House of Representatives have rescheduled to hold another meeting on November 29.

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