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December 09, 2019

CJ CGV to raise $286m from MBK-Mirae consortium in Asian operation revamp

PUBLISHED : November 18, 2019 - 15:55

UPDATED : November 18, 2019 - 15:55

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South Korea’s cinema chain CJ CGV said Nov. 18 its Hong Kong-based subsidiary has agreed to raise $286 million from a consortium of private equity firm MBK Partners and investment bank Mirae Asset Daewoo.

This came in a move to turn the subsidiary into a holding company that controls its Asian operations in China, Vietnam and Indonesia.

Related:
MBK to buy 25% in CJ CGV overseas business


CGI Holdings, now wholly owned by CJ CGV, will receive funds from the consortium in exchange for its 653,364 new convertible preference shares, which will amount to 28.57 percent of the entire stake, according to a regulatory filing. Following this, CJ CGV’s ownership in CGI Holdings will be lowered to 71.43 percent.

CJ CGV will be entitled to carry out a call option for the new shares, while the investors may exercise the drag-along rights. The transaction is poised to be complete by Dec. 27.

The company said CGI Holdings will use the proceeds to reimburse the stake purchases in other subsidiaries in Vietnam and Indonesia and meet working capital needs.

By Nov. 29, the new holding entity will acquire a 100 percent stake in CJ CGV Vietnam Holdings in return for $85.3 million and a 23 percent stake in Graha Layar Prima, an Indonesian joint venture, for $72.9 million.

Earlier in November, CJ CGV said CGI Holdings will merge with another Hong Kong-based arm IKT Holdings.

CGI Holdings currently control subsidiaries in Shanghai and Hong Kong. Its net profit in 2018 jumped 22.6 percent on-year to 1.4 billion won ($1.2 million).

CJ CGV is the multiplex cinema chain arm of food-to-entertainment conglomerate CJ Group.

By Son Ji-hyoung (consnow@heraldcorp.com0

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