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Cinema XXI, Indonesia’s Largest Exhibition Chain, May Be Seeking IPO, Says Report

Indonesia’s largest cinema chain Cinema XXI could be heading to the stock market through an IPO by early next year.

Early details were reported by the Nikkei newspaper citing its finance industry partner publication Dealstreet Asia. They said that the company may seek to raise $300 million of fresh capital.

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Last year, financial news service Bloomberg said that Cinema XXI ‘s owners were seeking to raise $500 million-$1 billion through an IPO. The reasons for the large discrepancy are unclear.

The company holds a 60% market share of Indonesia’s cinema exhibition industry and, as of December 2022, operated 225 cinema venues with a total of 1,217 screens.

Moreover, the Indonesian cinema market has enjoyed one of the strongest recoveries of any territory in Asia. Cinema admissions passed pre-COVID levels last year and reached an all-time record by mid-December.

Cinema XXI was established in 1987, at a time of government-sanctioned monopolies in many industry verticals. Cinema XXI previously had a controlling position in Indonesian film exhibition and, through various affiliate companies, also dominated the import of Hollywood movies.

Its exhibition dominance was punctured by a local private equity backed venture Blitz Megaplex which launched its first multiplex in 2006 and which later sold out to Korea’s CJ-CGV. A bigger challenge came from Cinemaxx, initially backed by Lippo, a large local conglomerate. Cinemaxx has since been rebranded as Cinepolis, following a significant minority investment in 2019 by the Mexican multinational exhibition group.

A change of the law in 2016 removed restrictions on overseas investment in the cinema sector. Later that year, Singapore sovereign wealth fund GIC poured $265 million into PT Nusantara Sejahtera Raya (NSR), Cinema XXI’s parent company. But the Nikkei reports that GIC’s holding has now been trimmed to less than 0.1% of the company equity and that Cinema XXI’s major shareholder is Harkatjaya Bumipersada, which owns a 79.98% interest, followed by Adi Pratama Nusantara at 19.99%.

Muslim-majority, Indonesia has long been regarded as a huge, under-tapped growth market for cinema, though its geographical status as a massive archipelago poses infrastructure problems. Now, the growth of streaming platforms represents a double-edged sword: it is both a challenge to the cinema-going experience and training ground for more local filmmakers, some of which are beginning to enjoy greater international success.

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