Indonesian production firm MD Pictures eyes strategic investors after IPO

Indonesian film and TV production company MD Pictures, whose initial public offering opens on the Jakarta Stock Exchange today, is looking to induct foreign partners as strategic investors in the medium term in a bid to create greater value for the company.

In an exclusive interview to DEALSTREETASIA, MD Pictures head Manoj Punjabi said: “Now that the negative investment list is opened up by the Indonesian government, we are interested in having right partners if it adds value. (We) can sell a part stake, if a player comes and together we can create bigger value for a different level of growth.”

The company is even planning to set up a $5-million fund from the IPO proceeds to finance its Hollywood projects. “We plan to produce smaller Hollywood projects to begin with and later focus on promoting Indonesian content overseas as well”, Punjabi said.

The company is also planning joint ventures, with a capital of $3-5 million, with Chinese and Korean companies to promote local content with international appeal.

Founded in 2003, MD Pictures, which registered a net profit of $6 million last year, is targeting to reach a bottom line of $12 million in the coming years, he added.

In its IPO, the company is selling a combination of new shares and convertible bonds, representing 15% of the group capital. At IDR210 per share offer price, the company is looking at a market cap of $150-200 million and targeting to raise around $30 million from the offering.

The company intends to utilise the IPO proceeds for working capital, expansion and Hollywood production projects.

MD Pictures’ line of business includes production, marketing and sales of films. While the company has its own filming studios, it also works with other production houses as the distributor of films to cinemas, free to air TV, home video and digital viewing.

The company said, in its IPO prospectus, as of 2017, around 35% of the entire population or around 42.7 million people make up Indonesia’s film market, up from 37.2 million people the previous year. However, the market is currently considered under-served with only 280 cinemas and 1,359 screens nationwide.

MD Pictures claims 24.1 per cent market share with more than 9 million viewers in 2017, highest in the Indonesian film industry.

The government, through the Creative Economy Agency (Bekraf), has vowed to support the country’s film industry by targeting to increase the number of cinemas to 5,000 with over 200,000 screens in the space of 5 years.

Furthermore, the government has also removed the film industry from the Negative Investment List (DNI), allowing foreign investors to control more shares in businesses.

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.