KUALA LUMPUR, Nov 29 — Malaysia Debt Ventures Bhd (MDV) clarified that the RM400 million loan to equity conversion was not a write-off exercise due to its inability to repay the loan to the government.

“The loan conversion to equity was crucial to enable us to continue our role as a technology financier to small and medium enterprises (SMEs). The exercise was to strengthen our equity position and to ensure that we have sufficient equity to support our future portfolio growth,” MDV said in a statement today, in response to recent media reports on the loan write-off.

It said the RM400 million was the balance from the RM1.6 billion original loan from the government, out of which a total of RM1.2 billion was paid back. MDV said the additional equity facilitated by the loan to equity conversion had enabled the company to strengthen its paid-up capital, in order to balance the size of its portfolio.

“Since our inception in 2002, our loan portfolio currently stands at about RM1.3 billion and to date, we had disbursed over RM8.4 billion to more than 600 projects undertaken by SMEs.

“The high value projects are in sectors such as information and communications technology, green technology and biotechnology, which are high risk but high in potential,” it said.

Through prudent disbursement and stringent loan monitoring processes, MDV achieved a profit of RM91 million over five years including the forecast for financial year ending December 31, 2014. — Bernama