Jakarta. Medco Power Indonesia and Amman Mineral Nusa Tenggara, subsidiaries of oil and gas giant Medco Energi International, have decided to postpone their initial public offering plans to 2020 and 2019 respectively, as they are trying to improve financial performance.
"We are still waiting for the market's response. The IPOs' timelines are still flexible," Medco Energi International human capital and business development director Amri Siahaan told reporters on Monday (27/08)
Amman has been investing in exploration of mining resources, which made its parent company's profit decline in the first half of the year, resulting in the decision to postpone the IPO.
Meanwhile, Medco recorded $41.4 million in net profit in the first six months, down 35 percent from the same period last year.
Both companies wanted to conduct their IPOs this year.
According to Amri, Medco is still focused on developing a 275-megawatt steam and gas power plant in Batu Hijau, Sumbawa, West Nusa Tenggara, and a 110-megawatt geothermal power plant in Ijen, Central Java.
Amman is exploring the Elang copper and gold mine in Sumbawa. Located about 60 kilometers from the company's Batu Hijau mine, Elang has potential reserves of 6.5 million tons of copper and 19.5 million ounces of gold.
Amman is also constructing a $1 billion copper smelter in Sumbawa, which will be able to produce between 1.6 million tons to 2 million tons annually.
The smelter will be complete in 2022. Once it starts operations, the company will process copper and gold concentrate from the Batu Hijau and Elang mines.
Amman also signed a memorandum of understanding with Freeport Indonesia in August last year to conduct a joint study to construct another smelter, also in Sumbawa.