- FILM & PEOPLE
- Korean Film News
Korean Film News
CJ CGV Raises Funds through 30% Sale of Business in China and SE Asia
Nov 28, 2019
- Writerby Pierce Conran
Korean Exhibition Giant Plans Further Overseas Expansion, Eyes HKSE IPO
In order to raise funds for its plans of expansion in several global markets, CJ CGV, Korea’s top multiplex chain, has sold off a 30% stake in its locations in China and Southeast Asia. The sale, which was made to the private equity funds MBK Partners and Mirae Asset Daewoo PE, raised USD 286 million for the exhibition giant.
CJ CGV now owns 72.43% of CGI Holdings, an entity that was set up to consolidate the outfit’s theatrical operations in China, Vietnam and Indonesia. The private equity consortium owns the remaining share. The company stated that the sale will allow them to lighten their debt load and to help further their expansion plans overseas.
CJ CGV reported sales of KRW 497.5 billion (USD 427.1 million) during the third quarter of this year, up 5.2% from a year earlier. However, the company’s operating profit has slowed 5.1% year-on-year to KRW 31 billion. Prior to the sale, CJ CGV’s debt ratio had climbed to 722.9%. The sale has brought that figure down to 435.9%.
HWANG Jae-hyeon of CJ CGV’s communication team stated that “Investors acknowledged the growth potential of our business in the Chinese, Vietnamese and Indonesian film cinema market.” Furthermore, the company is looking to attract investors by promising to list CGI Holdings on the Hong Kong stock exchange (HKEX). HWANG explained: “It is also part of our fundraising plans on its pre-initial public offering (IPO) proceeding. But we've not yet determined the detailed schedule of the IPO.”.