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MD Pictures sells 14.62% stake to China's Tencent
“MD Pictures will go global, and Hollywood will be one of the first steps and would be my starting point,” Punjabi said.
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Chinese technology conglomerate Tencent Holdings has acquired 14.62 of the publicly listed Indonesian production house MD Pictures.
In the transaction, MD Pictures founder and CEO Manoj Punjabi sold 14.62 percent of the homegrown film company, equivalent to 2.23 billion shares, thereby reducing his ownership to 8.86 percent.
The transaction was published in the company’s information disclosure on Tuesday, but it was not immediately revealed who Punjabi had sold his shares to. Later, it was confirmed that Tencent was the buyer.
“Yes correct. The 14.62 percent was sold to Tencent, so they have a minority [stake in MD Pictures],” Punjabi told The Jakarta Post on Friday.
With Tencent joining the roster, the company expected it would be easier to expand globally. “MD Pictures will go global, and Hollywood will be one of the first steps and would be my starting point,” Punjabi said.
Read also: Tencent tumbles after China media calls online gaming "spiritual opium"
Prior to the transaction, PT MD Global Media held the largest stake in MD Pictures with 37.72 percent, followed by Punjabi with 23.48 percent, PT MD Graha Utama with 12.78 percent, PT MD Global Investment with 12.38 percent and the rest owned by the Indonesian public, according to an announcement made by the company on Oct. 11.
With the recent transaction, Tencent replaced Punjabi as the second-largest shareholder, with PT MD Global Media retaining the largest stake.
The decision to look abroad comes after Chinese authorities have been tightening regulations over tech companies. Companies in the ASEAN market are seen as likely targets for expansion.
“They [Tencent] are strong in content, gaming and big movies. Indonesia is a big market that Tencent wanted to have [access to],” Punjabi said.
Punjabi went on to say that the company approached Tencent in August, offering them to invest in the only publicly listed national film company in Indonesia. The pitch to Tencent was part of the company’s roadshow to acquire new investors since November 2020.
Read also: Manoj Punjabi: Raising the bar for Indonesia’s film industry
Tencent is the second entity to buy shares in MD Pictures, after a smaller entity decided to purchase less than 5 percent of the company. The production house has not revealed possible further transactions after the Tencent deal but emphasized it remained open for investment.
MD Pictures booked Rp 35.97 billion (US$2.54 million) in net profit in the first half of this year in a turnaround from a net loss of Rp 33.62 billion suffered in the same period of last year.
The company’s strong performance amid the pandemic and the closure of movie theaters across the country were deemed to play a key role in convincing investors abroad, Punjabi said.
