CT Corp, one of Indonesia’s largest business conglomerates, aims to invite world-class investors to partner with all of its subsidiaries before it enters the IPO stage within five years, chairman and CEO Chairul Tanjung said.
“We want to be a global player who is among the best in the world, therefore we want to look for world-class investors and partners to expand CT Corp’s businesses. My target is that within five years we’ll be able to do this, before starting to offer shares in the capital market,” the 55-year-old former minister stated.
Last year, Singapore sovereign wealth fund GIC agreed to invest $387 million in Trans Retail, CT Corp’s retail arm. Recently, the group announced a strategic partnership with US-based Prudential Financial Inc for its life insurance business, Asuransi Jiwa Mega Indonesia (Mega Jiwa). Prudential Financial bought a 49 per cent stake in the unit for an undisclosed amount, in a deal that industry experts predict to be “the largest deal in the insurance space in a long time”.
Bank Mega is currently the only one of CT Corp’s dozens of units that have been listed on the Jakarta bourse.
The Indonesian Stock Exchange (IDX) – despite being located in Southeast Asia’s largest economy – is currently still relatively small, shallow and less liquid compared to bourses in neighbouring countries.
The IDX has only about 550 listings with a total market capitalization of $480 billion, compared to 755 listings in Singapore with $717 billion, 900 in Kuala Lumpur with $410 billion and 525 in Bangkok with $442 billion, according to data compiled by The Jakarta Post.
By holding off IPOs, Tanjung appears to be targeting a much larger market capitalization – both for his companies and the market – to maximize his gains. His empire injects $1 billion on average into the country every year through various businesses in financial services, media, lifestyle & entertainment, and natural resources.
The group now manages more than $10 billion in assets and employs over 100,000 people. Its most recognizable brands include Bank Mega, Bank Mega Syariah, Mega Life, Trans TV, Trans 7, Trans Fashion, and Transmart.
In 2017 alone, CT Corp plans to open 30 new Transmart outlets with an investment of Rp 12 trillion ($900 million). The group has also recently entered into several property projects with values ranging from $225 million to $1.5 billion.