KUALA LUMPUR, May 3 — Ekuiti Nasional Bhd (Ekuinas) says it is ready to acquire stakes in subsidiaries of government-linked companies (GLCs) that it has identified.
Chief executive officer Syed Yasir Arafat Syed Abd Kadir said high-level talks have taken place with the identified companies, although the decision hinges on the companies’ future plans.
“We are ready but it is also up to the companies, what they see going forward. As for Ekuinas, we still haven’t deployed Ekuinas’ tranche IV fund and we are willing to spend between RM30 million and RM300 million per company,” he said after a media briefing on the company’s 2018 financial results.
Earlier this year, Ekuinas launched the RM1 billion Ekuinas Direct (Tranche IV) Fund (Fund IV) — with an option to increase to RM1.5 billion.
To recap, Ekuinas exited three businesses last year with generated gross proceeds of RM114.9 million, achieving an internal rate return of 26.9 per cent.
Early this year, the state-backed equity firm expanded its investment portfolio and undertook two new investments and three follow-on investments with total committed capital of RM311.5 million.
This brings total cumulative investments in 41 companies to RM3.9 billion, which together with private capital, facilitated a total capital deployment of RM4.6 billion.
To a question on the equity fund’s investment direction this year, Syed Yasir said it would continue to invest in consumer-related companies as well as the technology space.
“We are looking at a fast-growing economy and investment in the technology space is unavoidable, but we capped our investment at only between 10 to 15 per cent of our fund size,” he added.
However, he said, Ekuinas would not be going overboard with investment in the technology space and the focus is on companies with a stable bottom line.
Syed Yasir said the government has poured in RM3.95 billion into Ekuinas since its inception in 2009.
Ekuinas is scheduled to receive RM5 billion from the government at a rate of some RM600 million a year.
The government’s commitment is expected to end after the firm has proved that it could be a self-funded entity.
“We have already received RM3.95 billion, but I would like to say that our fund size is already self-sufficient with RM2.75 billion cash in hand,” he added.
Meanwhile, chairman Raja Tan Sri Arshad Raja Tun Uda said the firm has also increased the Bumiputera equity ownership to RM5 billion, which is 1.5 times of the capital invested, in line with Ekuinas’ vision to create sustainable Bumiputera wealth and participation.
“This achievement has also led to the creation of RM6.6 billion in total economic value for all shareholders, representing a multiple of 2.0 times the capital invested,” he added. — Bernama