The Jakarta Post
Conglomerate MNC Group is planning to set up a new entity that will serve as a holding company for its pay TV and broadband businesses in a bid to better synergize the two.
Global Mediacom, which operates MNC Group's various media businesses, will name the new company PT Sky Vision Network (SVN) to operate pay TV business unit PT MNC Sky Vision and broadband business unit PT MNC Kabel Mediacom (MKM).
'We will establish the new entity some time this year, hopefully in the third quarter,' Global Mediacom chief financial officer Oerianto Guyandi said after an extraordinary shareholders meetings on Monday.
Oerianto said that a number of foreign businesspeople had expressed interest in investing in the new entity.
While refusing to disclose the amount of investment expected from foreign investors, Oerianto said the investment could be channeled through various options, such as an initial public offering (IPO) or convertible bonds.
Global Mediacom aims to float SVN's shares on the Indonesia Stock Exchange (IDX) over the next three years when MKM's business is expected to start becoming profitable.
MKM, also known as Play Media, was established in January 2013. It offers a fiber-based network service. Play Media targets to have a total of 700,000 home-pass subscribers this year and a total of 1.5 million in three to five years. Once SVN is in operation, MNC Group's pay TV and broadband businesses will operate under a single entity, simplifying investment portfolio options for investors, said Oerianto.
Aside from planning to set up a new company, MNC Group plans to soon buy back public shares in a number of its publicly listed units to avoid further losses in stock prices amid market volatility.
The group obtained approval during Monday's meeting to buy back shares in MNC Sky Vision, MNC, Global Mediacom and MNC Investama with a total budget of Rp 7.46 trillion (US$554.5 million).
The group will buy back as much as 5 percent of public shares in Sky Vision or 353.19 million shares worth Rp 636 billion. It will also buy back 10 percent of public shares in MNC or 1.26 billion shares worth Rp 3.2 trillion.
For Global Mediacom, it will buy back 10 percent of public shares or 1.27 billion shares worth Rp 2.2 trillion.
Meanwhile, for MNC Investama, it will buy back 10 percent of the stake in a transaction estimated to reach Rp 1.42 trillion.
Oerianto said the buy backs would be carried out as soon as the prices of the companies' share slumped.
The buy back option will be effective within an 18-month period starting from the time the companies got approval at the shareholders meeting.
Shares of Sky Vision, MNC, Global Mediacom and MNC Investama, recorded year-to-date (ytd) returns at levels of minus 12.19 percent, minus 16.9 percent, minus 17.72 percent and 1.09 percent, respectively, according to Bloomberg data.