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Jakarta Post

Blitzmegaplex set for IPO, debt swap

  • Anggi M. Lubis

    The Jakarta Post

Jakarta   /   Tue, March 18, 2014   /  12:06 pm
Blitzmegaplex set for IPO, debt swap

From one screen to another: Two people buy tickets from machines at a Blitzmegaplex blitzcard corner at Grand Indonesia shopping center, Jakarta, on Monday. The operator of the Blitzmegaplex cinema chain, PT Graha Layar Prima, is offering 140 million shares to the public at a price of Rp 2,800 (25 US cents) to Rp 3,300 apiece. JP/Nurhayati

Blitzmegaplex cinema chain operator PT Graha Layar Prima hopes to raise Rp 462 billion (US$40.9 million) in an initial public offering (IPO) scheduled for early next month, to finance the company'€™s expansion plans.

It also plans to convert its debt to shares, also known as a debt to equity swap (DES), soon after the IPO, to pay off $30.5 million in debts to its two foreign creditors, Graha director Brata Perdana told a press conference on Monday.

The company, which runs the popular Blitzmegaplex cinema franchise, will float 140 million shares, or 46.42 percent of its enlarged capital, to the public, for around Rp 2,800 to Rp 3,330 each. The firm has appointed Indo Premier Securities as underwriter.

'€œWe will use the funds we raise from the IPO to help our expansion plan this year and next year,'€ he said.

Brata said that the company would build seven new cinemas in Surabaya, East Java; Yogyakarta; and in Bandung, Cirebon and Karawang, all in West Java. He did not reveal which city would get more than one cinema.

Established in 2006, Graha currently operates 10 cinemas accommodating around 100 screens in Balikpapan, East Kalimantan; Bandung and Bekasi, West Java; Batam, Riau Islands; Serpong, Banten; and in Jakarta.

He said the company was upbeat about the future prospects of the cinema industry, given the low penetration of the industry in the archipelago.

'€œThere are about 10 provinces in Indonesia that have yet to have a cinema operating. Of around 490 cities in the country, only around 48 have cinemas,'€ Brata said.

Tourism and Creative Economy Ministry data shows that the number of cinemas and screens has been rising steadily from 142 cinemas and 458 screens in 2004, to 325 cinemas and 1,037 screens by Dec. 23, 2013.

Brata said that the company would also convert its total $30.5 million Tranche A loans it owed to Korean-based CJ CGV and Hongkong-based investment firm IKT Holding Limited to 200 million new shares.

CJ Group is currently the largest film distributor and investor in South Korea.

'€œThe debts are equivalent to 38 percent of our enlarged capital. Following this scenario, each of our creditors will have a maximum of 19 percent shares in our enlarged capital. We say maximum because the conversion rate per share will be at the same level as the agreed IPO price. And the figure [for the converted shares] might be lower, depending on our IPO result,'€ explained Brata.

Following the IPO and DES, Brata said the public would hold about 26 percent of Graha'€™s enlarged capital.

PT Layar Persada, which currently holds the majority of shares at 99.56 percent, will hold 32 percent of the shares after the offering, according to its published prospectus.

Asjaya Indosurya Securities analyst William Surya Wijaya said that the cinema operator had the potential to perform well on the bourse, given that no other cinema operators had entered the stock market, and considering its various theater types '€” such as its 4D feature '€” that other local companies had yet to offer.

The company saw its revenue rising 40.26 percent year-on-year to Rp 228.65 billion during the first nine months of 2013, compared to Rp 163.2 billion during the same period in the previous year

The firm has scheduled the book-building period, where it will generate, capture and record investor demand for the shares, to start on March 17, the offer period for April 2 to 4, and the allotment of shares for April 10 before a scheduled listing on the Indonesia Stock Exchange (IDX) on April 11.

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