HONG KONG – South Korea’s CJ-CGV will be well placed to expand the reach of its cinema operations into Indonesia, after the flotation of Graha Layar Prima, the holding company of Indonesian multiplex chain Blitzmegaplex.

Graha Layar Prima today issued details of its proposed initial public offering on the Indonesian Stock Exchange (IDX) in Jakarta.

The company will sell 140 million new shares at a price indicated as being in the IDR2,800-IDR3,300 range. That will raise IDR392-462 billion ($34.5 million-$40.6 million).

The new shares are equivalent to 85% of the existing share base or 46.1% of the enlarged capital.

The company revealed that after the IPO it is also prepared to convert loans from Korea’s CJ-CGV and Hong Kong private equity fund IKT into a further 200 million shares. If fully converted that would give CJ-CGV a 39.8% stake in the expanded capital and make the Korean major Blitz’s largest single stock holder.

Graha Layar Prima currently operates 11 Blitzmegaplex and Blitztheater complexes across the massive country, making it the second chain behind the 21 Group. Graha Layar Prima said that all the proceeds would be used for further expansion. It currently has plans for seven more cinemas in the next two years, with locations including Bandung, Karawang, Cirebon, Yogyakarta and Surabaya.

Graha Layar Prima enjoyed a 40% uplift in admissions last year to 5.3 million. Net earnings also rose 40% to IDR229 billion ($20.1 million) in the year to September, but it lost IDR3.73 billion ($300,000).

The company said that there is huge untapped demand for cinema in Indonesia, which has a population of 260 million, but just 700 cinema screens. That implies a lowly screen ration of just 2.1 screens per million inhabitants. Screen numbers have fallen from 2,300 20 years ago.

Affiliated to the CJ foods, fertilizer and entertainment conglomerate, CJ-CGV is one of the world’s top five cinema chains by admissions. It is the largest exhibitor in South Korea and has expanded by acquisition into Vietnam, where it is now the largest chain, and by organic development in mainland China. It also operates a single screen cinema in Hong Kong.

Indo Premier Securities was announced as the underwriter of the share offering. Shares are expected to begin trading on the IDX on April 11.