South Korea's CJ CGV to Increase Stake in Indonesia's CGV Blitz Cinema Chain
Jakarta. South Korea's largest movie theater chain CJ CGV will increase its stake in Indonesia's Graha Layar Prima, the operator of the CGV Blitz movie theater chain in a move to tap growth in the cinema market in Southeast Asia's largest economy.
CJ CGV has set aside 28.8 billion won ($25 million) to buy 50.6 million Ghaha Layar Prima shares by Aug. 1, the company said in a statement on Friday (22/07).
That is more than half of Graha Layar Prima's 99.3 million new Class-C shares, or 22.7 percent of its enlarged capital. The company is currently performing a rights issuance in order to raise Rp 650 billion ($49.4 million) to pay back loans and finance expansion.
CJ CGV currently holds 14.75 percent in the local company.
Other existing shareholders include Layar Persada (48.4 percent), and IKT Holdings (14.8 percent). The remainder is held by the public. Layar Persada said it would only exercise its rights to buy 1.98 million new shares.
CJ CGV's move came after the government relaxed foreign ownership rules in Indonesian cinema operators. Foreigners can now own up to 100 percent in local movie theater chains, with the government hoping that it would encourage the local movie industry to attract more investment.
Growth prospects for movie theater chains are still wide open with only 1,100 movie screens serving 250 million people in the archipelago, according to data from research provider IHS Technology.
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