Jakarta. Shares of Jakarta-listed oil and gas company Medco Energi Internasional soared on Monday (17/07), as it announced an acquisition of a majority stake in an Australian mining contractor, and as investors were upbeat on the company's financial performance.
Medco, which is controlled by the Panigoro family, announced on Saturday it is acquiring 44.3 percent of Macmahon Holdings. The move will make the Indonesian company the biggest shareholder.
The acquisition of Macmahon's 954.06 million shares is estimated to be worth $152 million.
Medco will acquire the stake through Amman Mineral Contractors, which is an affiliate of its copper and gold mining unit Amman Mineral Nusa Tenggara.
The news made Medco's shares, traded under the MEDC code, soar by 14.29 percent to Rp 2,720 per share, outperforming the flat Jakarta Composite Index.
Medco Energi president director Hilmi Panigoro said in a statement on Saturday that Perth-headquartered Macmahon's capacity in planning, design and mining technology will support Amman (previously called Newmont Nusa Tenggara) in leveling up its strategy and business operations.
As part of the deal, Macmahon will acquire Amman Mineral's mobile equipment, estimated at $145 million, and provide contract mining services to its Batu Hijau gold and copper mine in West Nusa Tenggara.
The deals are going to be wrapped up by the end of July.
Macmahon, which operates in Indonesia, Malaysia and Australia, owns heavy equipment and provides contractor services for open pit and underground mining.
It says it owns more than 100 excavators, 150 dump trucks, 50 drill rigs and maintenance facilities.
Macmahon chairman Jim Walker said the shareholder approval of the transaction marked a milestone for the company's business.
"Macmahon board is very pleased with the result. Maximizing value for all shareholders is of utmost importance to us and we firmly believe this transaction is a compelling opportunity for Macmahon and its shareholders," he said.
Medco has earlier announced its net income quadrupled to $43.1 million in the first quarter of the year, compared with the corresponding period last year. It also enjoyed a sharp 60.7 percent rise in its revenue to $210.3 million.