SCMA seeks approval for 1:5 stock split
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Publicly listed PT Surya Citra Media (SCMA) will seek shareholder approval in August or September for a stock split as the company aims to improve trading liquidity and bigger retail investors.
SCMA controls 99.99 percent of shares in television broadcasting company, Surya Citra Televisi (SCTV), one of Indonesia’s leading nationwide free-to-air channels with audiences in excess of 160 million viewers.
In a letter sent to the Indonesia Stock Exchange (IDX) on Thursday, SCMA says it would propose a stock split ratio of 1:5.
The company’s shares closed at Rp 10,850 apiece on Thursday, climbing 1.4 percent from Rp 10,700 a day earlier. The price is currently the highest among listed media companies. The stock split would bring shares in SCMA closer to the industry’s range of around Rp 2,000 apiece.
Shares in broadcasting company PT Media Nusantara Citra (MNCN), the owner of three television stations — RCTI, Global TV and MNCTV — closed at Rp 2,325 on Thursday, a 3.33 percent increase from the previous day.
Mastono Ali of PT CIMB Niaga Securities said that SCMA would likely see a quick increase in share prices after the stock split.
“The company has good performance and has been able to keep costs low since most of its prime programs are made in-house, which also can be used by its affiliated company, PT Indosiar Karya Media. Investors will pay attention to that, therefore, there is possibility that share prices will rise,” Mastono said.
He also said that there was possibility that SCMA might perform a rights issue or even a private placement after the stock split.
Prior to SCMA’s announcement of its stock split plan, Indosiar Karya Mandiri — which owns a television station Indosiar — also said that it would perform a stock split. Indosiar also proposed a stock split ratio of 1:5.
Indosiar’s share prices are also higher than other companies in the industry. Shares in the company (IDKM) closed at Rp 6,050 apiece on Thursday, a 4.31 percent increase from Rp 5,800 a day earlier.
SCMA and IDKM are under the same parent company, PT Elang Mahkota Teknologi (EMTK). According to a file on the IDX’s website, EMTK currently holds a 79.66 percent stake in SCMA and a 78.76 percent stake in IDKM.
“The companies are in the same group. Therefore, it seems like the stock split plans came from the owner and will be conducted at the same time to cut costs,” Mastono said.
—JP/ Raras Cahyafitri