Benny Suherman (sixth from left) presses the opening bell during the listing of PT Nusantara Sejahtera Raya on Wednesday, August 2, 2023.
Courtesy of Nusantara Sejahtera Raya
Indonesia’s largest cinema chain, known as Cinema XXI, was successfully listed on the Indonesian Stock Exchange on Wednesday, with its shares closing 17% higher at 316 rupiah ($0.02). The IPO brought movie magnate Benny Suherman, the company’s co-founder and majority shareholder, into the billionaire list with an estimated net worth of about $1.1 billion.
Shares in PT Nusantara Sejahtera Raya, the chain’s owner, were valued at 270 rupiah and the IPO was 25 times oversubscribed. The 10 per cent stake on offer raised Rs. 2.2 trillion (US$145 million), taking Cinema XXI to Rs. 22.5 trillion (US$1.5 billion).
Suherman, who holds a 54% stake through his holding company Harkatjaya Bumipersada, was able to cash out part of his stake in the IPO by selling some shares to GIC, Singapore’s sovereign wealth fund, under an earlier agreement. (His business partner Harris Lasmana did the same and holds 13.5%.) Suherman resigned as chairman in April, leaving the post to his son Suryo. (His other son, Arif, has a seat on the board and his son-in-law Hans Gunadi is president and director.)
Suherman is credited with pioneering the film distribution business in Indonesia, co-founding what was then called Subentra Nusantara in 1988 with Lasmana and former President Suharto’s late cousin Sudwikatmono. For years, the company had a near-monopoly on the distribution rights to Hollywood films. Sudwikatmono sold his shares to Suherman and Lasmana in the late 1990s following the Asian financial crisis and Suharto’s resignation.
Following the government’s decision in 2016 to open the sector to foreign investors, GIC agreed to invest in Cinema XXI. The strategic partnership, as it was then known, gave GIC a call option to buy a 22.5% stake in the theater chain when it went public. During the IPO, GIC exercised that option at the IPO price, acquiring the agreed stake for $334 million.
Cinema XII, which owns nearly 60% of Indonesia’s cinemas, allocated nearly two-thirds of the IPO funds to expand its theater network. It has 225 theaters with 1,216 screens — more than four of its competitors combined — and plans to invest $40 million this year to add another 80 screens. Competitors include the Cinemaxx chain, founded by Brian Riady, grandson of billionaire Mochtar Riady. In 2019, Cinemaxx was renamed Cinépolis Indonesia after Mexican cinema chain Cinépolis acquired a 40% stake for US$110 million.
The pandemic took its toll on cinema, with people flocking back to the cinemas. While sales in 2022 rose to Rs 4.4 trillion from Rs 1.2 trillion the year before, it was still below the company’s highest annual sales – Rs 6.89 trillion – in 2019.
The company expects the cinema industry to surpass pre-pandemic levels by next year and the total market to grow to 20.6 trillion rupiah by 2027. According to the Association of Indonesian Cinema Managers (GPBSI), the country has a total of 2,100 cinema screens (as of last year) and there is a possibility of expansion to 15,000 screens.
Suherman isn’t the first to get rich from Indonesia’s vibrant film industry. Among the richest in the country is Manoj Punjabi, co-founder of publicly traded film studio MD Pictures, who has a net worth of $1.7 billion.
— With the support of Gloria Haraito
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