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Singapore Government Invests $260 Million in Indonesian Cinema Chain

Variety logo Variety 12/6/2016 Patrick Frater
© Provided by Variety

Singapore sovereign wealth fund, GIC has invested US$260 million (IDR3.5 trillion) in Nusantara Sejahtera Raya, Indonesia’s largest cinema operator.

The company operates the Cinema 21, Cinema XXI and The Premiere brands and controls the majority of the massive nation’s cinemas. It is also comnected to the companies that sub-distribute movies on behalf of all six major Hollywood studios.

The value of the deal was confirmed in a joint statement. But the proportion of 21 Group’s equity to be held by GIC was not disclosed. GIC described its agreement as a “strategic partnership (that) would expand NSR’s cinema footprint nationally to provide world-class entertainment for Indonesians.”

“GIC’s investment is a recognition of the work we have done to build our company and a validation of the tremendous opportunities we see ahead. We remain committed to providing affordable entertainment to Indonesians and supporting the local film production industry,” said Benny Suherman, NSR founder.

The move follows the proposed relaxation of Indonesia’s rules on foreign investment in the film sector earlier this year. For decades, film has been on a so-called negative list of industries off limits to foreign companies. South Korea’s CJ-CGV also has a significant stake in the much smaller multiplex player Blitz.

As of December 2016, NSR operates 864 screens in 157 cinemas across 36 cities in Indonesia. Recent estimates put the country’s total screen count at some 1,300.

The GIC move caught many executives by surprise at the CineAsia exhibitors and distributors convention taking place this week in Hong Kong.

“We checked whether the GIC asked for any advice from any of the Singapore exhibitors. It appears that they did not,” said one executive at CineAsia from South East Asia.

“If their $2560 million buys them complete ownership, GIC has got a great deal,” said another CineAsia attendee.

With a population of some 260 million, Indonesia is one of the most populous nations on the planet, but is considered very significantly under-screened. The sector has seen the entrance of Blitz, initially backed by modest amounts of private equity, about ten years ago. More recently one of Indonesia’s major conglomerates, the Lippo Group, also started building cinemas under the Cinemaxx brand. Its stated objective is to open 2,000 screens in the next ten years.

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