Saban, Creador anchor $228m MNC Skyvision IPO

Asian Venture Capital Journal
July, 10, 2012

Saban Capital Group and Creador Capital have acted as anchor investors in the IPO of MNC Skyvision, the largest pay TV company in Indonesia. The company, which began trading on the Indonesia Stock Exchange on Monday, raised IDR2.15 billion ($228 million) through the offering.

Although the shares were more than two times oversubscribed, the company fell short of its $260 million target – an amount that was already reduced last month from an ambitious $400 million. It also failed to beat coal miner Golden Energy Mines – which raised $245 million in November 2011 – in realizing Indonesia’s biggest IPO of the past 12 months.

“What we liked about Skyvision is that there are very low levels of penetration to date for pay-television in Indonesia,” Sumeet Jaisinghani a Hong Kong-based director at Saban Capital told AVCJ. Based on that, we think the market is poised for very sustainable long-term growth. Skyvision today is the dominant market player, with a roughly 70% market share.” MNC Skyvision’s offering was priced at IDR1,520, the lower end of the IDR1,460-1,750 indicative price range set last month. The stock opened at INR1,650 on Monday,before ending the day at IDR1,540.

The company, which is a unit of media group Global Mediacom, sold a 20% stake – or 1.42 billion shares – in its enlarged capital to the public. Saban Capital bought 17% of the offering, while Creador Malaysia took a further 13%.

“MNC Skyvision is a prime beneficiary of the overwhelming trends that are attracting Indonesians to pay-TV,” added Saban’s Jaisinghani. “We think this is a great play on consumer demand within Southeast Asia.”

The company originally planned to go public in the third quarter of last year, but faced delays due to pricing concerns amid weak investor sentiment.

Indonesia has become the sweetheart of both local and international investors, largely thanks to its expanding consumer base. According to the World Bank, from 1999 through the end of 2011, the number of middle-class consumers in the country grew by 50 million to more than 130 million. Media companies stand to benefit as more people are willing to buy televisions and subscribe to pay-to-view channels.