Jakarta-based PT Nusantara Sejahtera Raya Tbk — which operates the country’s largest cinema chain, Cinema XXI — is planning to raise 2.4 trillion rupiah ($158.48 million) in an initial public offering.
The company will issue 8.3 billion new shares, representing 10% of total shares, priced at 270-288 rupiah apiece, the company announced on Friday.
DealStreetAsia reported in June 2023 that Cinema XXI could raise up to $300 million in its IPO.
The book-building process is scheduled from July 10-14, 2023. The issue will be open from July 27-31 and the company will list on the DX on Aug 2.
Cinema XXI has appointed PT Indo Premier Sekuritas, PT JP Morgan Sekuritas Indonesia, PT Mandiri Sekuritas, and PT UBS Sekuritas Indonesia as underwriters in the IPO.
According to its IPO prospectus, PT Harkatjaya Bumipersada is the majority shareholder of Cinema XXI with an ownership of almost 80%, followed by PT Adi Pratama Nusantara (20%,) and Singaporean sovereign wealth fund GIC-backed Salween Investment Private Limited (0.01%).
Besides the IPO, Harkatjaya and Adi Pratama plan to sell 8% and 2% of their shares, respectively, via a private placement. Moreover, Harkatjaya and Adi Pratama signed a call option agreement in Dec 2016 with Salween Investment that gives the latter an option to buy 15 billion shares of Harkatjaya and 3.75 billion shares of Adi Pratama.
After the IPO, private placement, and call options, Harkatjaya’s ownership in the company will be reduced to 46%, Adi Pratama’s to 11.5%, and Salween Investment’s to 22.51%.
The fundraising from the IPO will be used to add more cinema chains in Indonesia, repay debt to PT Bank Rakyat Indonesia, and for working capital.
Market leader
Being a market leader in the cinema industry gives a positive impact to the company’s IPO, said Moelonoto The, President Director of Indo Premier Sekuritas.
According to Euromonitor International, Cinema XXI dominated the market with 1,216 screens — 58% of total screens across the country — and 69% of cinema goers in 2022.
Cinema XXI gets 65% of its revenue from ticketing, 30% from food and beverages, and rest from advertisements. “It recorded 59-69% of average margin profit,” The told reporters on Friday.
Cinema XXI recorded revenues of 4.4 trillion rupiah in 2022, up more than 243% compared to 1.28 trillion rupiah in 2021. The company booked profits of 505 billion rupiah in 2022 after suffering from losses of 366 billion rupiah in 2021 and 579 billion rupiah in 2020.
“Our finances have slowly improved to pre-pandemic level. The revenue in 2022 is equal to 64% of revenue in 2019 of 6.89 trillion rupiah, despite operating in full capacity after the pandemic in May 2022,” Hans Gunadi, CEO of Cinema XXI, said.