Mar 22, 2011

CVC returns to Lippo, ties First Media

One of world's largest private equity CVC Capital Partners Asia Pacific III LP, via its subsidiary dubbed Asia Link Holdings Limited, is poided to put Rp2.35 trillion investment in PT First Media Tbk (KBLV) Group.
In an official press statement submitted to Indonesia Stock Exchange today, First Media President Director Hengkie Liwanto said First Media and its subsidiaries have entered into an investment agreement and shareholders agreement with Asia Link on March 21 2011, following a recommendation of First Media's financial advisor Bank of America Merrill Lynch.
Referring to the agreement, CVC will indirectly have a 49% shareholding in PT Link Net, subsidiary of First Media. The controlling shareholder remains First Media with 51% stake.
First Media hopes that the strategic alliance with CVC is expected to fulfill the market demand for network and broadening internet coverage services.
In return, CVC has rights to put its executives at board of directors or board of commissioners in Link Net.
CVC Capital's proposed investment in Link Net is following the previous alliance with Lippo Group, controlled by Riady family, in PT Matahari Department Store Tbk (LPPF).
Mid last year saw an establishment of joint venture company dubbed PT Meadow Indonesia between PT Matahari Putra Prima Tbk (MPPA) and CVC Capital with 20% and 80% shareholdings respectively. Meadow Indonesia is controlling shareholder in Matahari Department Store.

Disclosure: No position at the stock mentioned above.

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