Former Indonesian President BJ Habibe, front left, with Triawan Munaf and the cast and crew of the film 'Rudy Habibie.' (Antara Photo/Teresia May)

MD Pictures Forms Joint Venture, Prepares Hollywood Debut Following IPO


AUGUST 08, 2018

Jakarta. Following its sizzling debut on the local bourse last month, Jakarta-based production house MD Pictures announced a joint venture with two overseas companies, in addition to plans to make its Hollywood debut this year.

"We want to use the proceeds from this IPO for our big plan. We are ready to go global and move to the next level. This IPO could be a benchmark for the film industry," MD Pictures chief executive Manoj Punjabi told reporters on Tuesday (07/08).

MD Pictures sold 1.3 billion new shares, equivalent to 13.75 percent of its enlarged capital, in an initial public offering last month, reaping Rp 275 billion ($19 million). However, this was less than its initial target of Rp 416 billion.

The company is the first movie producer ever to list on the Indonesia Stock Exchange (IDX). Its stocks, trading under the FILM ticker symbol, closed at Rp 314 per share, or 50 percent higher than its IPO price, bucking a 0.16 percent slump of the broader stock index on Tuesday.

Aside from the IPO, the company also raised Rp 25 billion from the sale of 119 million mandatory convertible bonds – a type of financing companies mainly undertake to avoid pure debt, as these will eventually be converted into equity.

Since its establishment in 2002, MD Pictures has produced a myriad of local blockbusters, including the romantic film "Ayat-ayat Cinta" and "Habibie & Ainun," a biopic about former Indonesian President BJ Habibie.

MD Pictures will allocate all the proceeds from its IPO towards working capital for business expansion, studio upgrades, sound-stage improvement and the acquisition of new talent.

The company has set a net income target of Rp 100 billion for this year, up 66.7 percent from last year.

Joint Venture

MD Pictures will create a joint venture with South Korea's Invictus House and China's Xing Xing Digital Studio, with a total investment of around $5 million.

Manoj said each company will hold a third of the shares in the joint venture, which will produce a mystery or horror film called "Whispering Corridor," to be directed by Awi Suryadi.

"I just got back from China to complete the paperwork and we will start production this year," Manoj said, adding that the film will be completed within two years.

Aside from the joint venture, MD Pictures has also partnered with a production house in Hollywood to produce a film at a studio in Los Angeles, California.

"The film budget is set at between $5 million and $10 million. Next year, we will begin to shoot at the Hollywood studio and we are set to launch an international release," Manoj said.

He added that he wants to launch at least 12 films per year, each with a budget of between $8 million and $25 million.

Manoj said with help from a digital content provider, he also expects MD Pictures films to capture a larger international audience.

Indonesian Film Industry

Manoj said he has a positive outlook on the local film industry because the number of people watching Indonesian films in theaters continues to grow.

According to the website, which derives its data from local theaters, 43 million people watched Indonesian films last year, which is 22 percent more than a year earlier. MD Pictures captured 24 percent of the market, with 10 million people having watched its films last year, the data showed.

"We target a 20 percent increase in the number of people watching Indonesian films in theaters [this year]," Manoj said.

Indonesia currently has more than 1,300 movie screens, with around 1,000 owned by 21Cineplex and 223 belonging to CGV Cinema. Cinemaxx and a few others make up the rest.

That means that there is one movie screen for between 260,000 and 270,000 people, which is far below the likes of Malaysia, Taiwan and Singapore, where there is one screen for about 30,000 to 40,000 people.