CJ CGV, South Korea's largest movie theater chain, will increase its stake in Indonesia's Graha Layar Prima (GLP), the operator of the CGV Blitz movie theater chain in the Southeast Asia's largest economy.
CJ CGV has set aside 28.8 billion won (US$25 million) to buy 50.6 million stocks of GLP by Aug. 1, the company said in a recent statement.
CJ CGV will hold 42.77 percent of GLP shares when it completes buying the stocks next month. The Korean company made a guarantee of loan (34.2 billion won) for PT Layar Persada, the largest stockholder of GLP in Indonesia.
Such a move by CJ CGV came after the Indonesian government had relaxed rules on foreign ownership of cinema operation in the country. Foreigners can now have ownership of up to 100 percent in local movie theater chain sector, which would, the government hopes, encourage the Indonesian local movie industry to attract more foreign investment.
The growth potential of movie theater chain business is tremendous with only 1,100 movie screens serving 250 million people in the nation of archipelagos, according to data from the market researcher IHS Technology.