Bimantara plans IPO for TV holding company

Rendi A. Witular, Jakarta

Media and telecommunications conglomerate PT Bimantara Citra plans to sell shares in PT Media Nusantara Citra (MNC) to the public via an initial public offering (IPO), possibly next year, in a bid to raise cash to finance the expansion of its media businesses.

MNC is a holding company that currently houses television stations Rajawali Citra Televisi Indonesia (RCTI) and Global TV, and will later house another TV station, TPI.

Bimantara president director Hary I. Tanoesoedibjo said the company would sell some 20 percent of its stake in MNC to the public, possibly next year or in 2006, with proceeds from the IPO to be used to expand the TV stations and to set up a new radio station network and print media.

"We plan to seek financing from several sources to finance our media expansion in the future. Our goal is to establish integrated media businesses and become the country's media kingpin," said Harry during a press conference on Friday.

Publicly listed Bimantara has a 100 percent ownership in MNC, which owns a 100 percent stake in RCTI, 70 percent in Global TV and possibly 75 percent in TPI. Bimantara is still in the legal process of transferring the 75 percent stake in TPI to MNC.

"We expect to wrap up the share transfer in the next three to six months by converting our bonds and debts in TPI, worth about Rp 500 billion (US$55.5 million), for a 75 percent share," said Hary.

The integration of the three TV stations under one holding company will enable the stations to share infrastructure resources and programs, thus making their operations more efficient but with a wider network, he said.

Bimantara, which was founded by Bambang Trihatmodjo, the second son of former president Soeharto, has focused on the media and telecommunication sectors over the past five years.

In the telecommunications sector, the company has teamed up with U.S.-based telecommunications company Qualcomm Inc. and South Korea's KTF Co. in establishing a code division multiple access-based cellular operator, PT Mobile-8 Telecom, which provides cellular services under the brand name Fren.

At present, the company has some 200,000 cellular subscribers.

Bimantara plans to seek financing to expand the coverage of Mobile-8 outside of Java, possibly inviting new strategic investors and selling some of the company's non-core assets, such as shares in several property, transportation and gas infrastructure companies.

"We are planning to sell several of our non-core assets in the future, based on precise timing and the necessity to help finance the expansion of our telecommunications business," said Hary.

For this year, Bimantara has projected an increase in operational revenue to about Rp 1.8 trillion, compared to Rp 1.57 trillion last year. For the first nine months of this year, the company's revenue is estimated at about Rp 1.3 trillion, with a net profit of as much as Rp 90 billion.

RCTI has accounted for the majority of this year's revenue.

Looking to next year, Hary said the company's operational revenue was expected to grow by as much as 40 percent, with RCTI and Mobile-8 expected to account for most of the revenue. Bimantara also expects additional revenue from the consolidation of the TPI financial accounts into the company.

Bimantara shares ended higher by Rp 25 at Rp 2,275 on the Jakarta Stock Exchange on Friday.