M

edia conglomerate PT Global Mediacom (BMTR) plans to fortify its finances by expanding its slice in PT MNC Sky Vision (MSKY), the conglomerate's strongest performing subsidiary, company executives said recently.

Global Mediacom president director Hary Tanoesoedibjo revealed that BMTR sought to expand its stake in MNC Sky Vision beyond the current 66.5 percent. 'MSKY has grown by a formidable 40 percent annually', he said. He added that 'not many companies could touch that growth rate'.

'Therefore we want to enlarge our stake in MSKY to fortify our business at BMTR,' he further added.

MNC Sky Vision operates three paid television channels comprising Indovision, OkeVision and TopTV, which have a combined sector market share of 71 percent.

The company's revenues climbed 37.7 percent year-on-year to Rp 2.4 trillion (US$247.2 million) by the end of 2012, during which it had acquired 1.7 million subscribers.

Hary, however, did not specify the amount of shares Global Mediacom sought to acquire, saying that the parent company had to 'negotiate' with MSKY.

Other MNC Sky Vision shareholders include PT Bhakti Investama (9.6 percent), PT Djaja Abadi Konstruksi (3.88 percent) and the shareholding public (19.97 percent).

He added that Global Mediacom had tapped into its 'bountiful' internal cash to fund the purchase of shares. 'And if our internal cash fund falls short, we could take out a bank loan or conduct rights issue,' he said.

Global Mediacom finance director Oeriyanto Guyandi further added that the company possessed approximately Rp 952 billion in cash and its equivalent.

'However, we have yet to decide on the amount we should use for the purchase,' he said.

Global Mediacom earned Rp 8.9 trillion in revenues at the end of 2012, 24.6 percent higher than earnings at the end of 2011. Net income rose 71.3 percent year-on-year to Rp 1.9 trillion.

The company has received shareholder approval to distribute 25.8 percent of this net income as dividends worth a total Rp 335 billion.

David F. Audy, a director at Global Mediacom, pointed out that pay television in Indonesia still had ample room to grow. 'The penetration rate of pay television in Indonesia was 4.8 percent in 2011, the lowest in Asia Pacific,' he said.

He added that pay television in the country was expected to register the region's highest compound annual growth rate of 26.7 percent.