CGV Cinema Delays Paying USD 9 Million Debt To Korea Development Bank, PSBB Effect?

Illustration. (Photo: CGV)

JAKARTA - The management of the CGV cinema network, PT Graha Layar Prima Tbk, announced that they have amended the loan agreement with The Korea Development Bank (KDB). In the amendment, the company coded as the issuer BLTZ asked for an extension of the maturity period of the debt payment from the South Korean bank.

Quoted from the disclosure of information on the Indonesia Stock Exchange (IDX), Monday, October 19, it was stated that the amendment concerns the change in the amount of loan facilities from KDB, which was previously US $ 10 million, to US $ 9 million (Rp. 132.3 billion at an exchange rate of Rp. US dollars).

"Because the company has already paid a loan facility of US $ 1 million," wrote the CGV management.

The company also explained that the maturity period for CGV debt payments to KDB is October 2020. However, CGV asked for an extension of the maturity date for another year, or until October 2021.

The KDB loan facility to CGV worth US $ 10 million was announced on October 8, 2019. The guarantee document for obtaining the loan facility is the Corporate Guarantee from CJ CGV as the controlling shareholder of the company.

"The purpose of the loan is to finance the company's working capital needs," explained CGV management.

For information, CGV's financial performance was devastated in the first half of 2020 due to the COVID-19 pandemic. CGV only earned IDR 233.84 billion in revenue in the first half of 2020, down 191.81 percent from IDR 682.39 billion in the first semester of 2019.

Revenue from cinemas decreased by 205.93 percent from the previous Rp.444.09 billion to Rp145.16 billion in the first semester of 2020. Revenue from food and beverages also only contributed IDR60.37 billion, event and advertising revenue of IDR28.20 billion, and revenue from license and management services contributed Rp. 87.42 million.

As a result, CGV had to bear a net loss of IDR 185.46 billion in the first half of this year. In fact, in the same period in 2019, CGV achieved a net profit of IDR 41.10 billion.

PT Graha Layar Prima Tbk's cinema network consists of CGV Cinemas and Blitztheater. After the entire cinema network closed since March 2020, CGV finally opened six cinemas in Bandung.

Meanwhile, for the capital city, CGV is still waiting for confirmation from the Provincial Government of DKI Jakarta. CGV has submitted a permit to the DKI Jakarta Tourism and Creative Economy Office to reopen cinemas.

If the DKI Provincial Government has received the application letter, then they will visit as well as review the readiness of the CGV cinema network in DKI Jakarta. After that, the DKI Provincial Government will provide an assessment and will give recommendations whether to open it or not.