CEO: Ekuinas ready to acquire GLCs
Ekuiti Nasional Bhd (Ekuinas) is ready to acquire stakes in subsidiaries of government-linked companies (GLCs) identified by the group, said chief executive officer Syed Yasir Arafat Syed Abd Kadir.
KUCHING: Ekuiti Nasional Bhd (Ekuinas) is ready to acquire stakes in subsidiaries of government-linked companies (GLCs) identified by the group, said chief executive officer Syed Yasir Arafat Syed Abd Kadir.
The CEO said high-level talks have taken place with these identified companies, although the decision hinges on the companies’ future plans.
“We are ready, but it is also up to these companies -- what they see going forward. As for Ekuinas, we are willing to spend between RM30 million to RM300 million per company,” he said during a media briefing yesterday on the company’s financial results.
To note, for its financial year ended December 31, 2018 (FY18), the Ekuinas Direct (Tranche II) recorded a Gross Portfolio Return of RM490.1 million, enerating annualised gross internal rate of Return (IRR) of 14 per cent and net IRR of 9.8 per cent.
Its third fund, Ekuinas Direct (Tranche III) Fund posted a gross portfolio return of RM53.5 million, translating to an annualised gross IRR of 4.5 per cent.
Since inception, Ekuinas had undertaken investments in 41 companies through Direct Investments and Outsourced Programme, amounting to RM3.9 billion, which together with private capital, facilitated a total capital deployment of RM4.6 billion that positively impacted the Malaysian economy.
In FY2018, Ekuinas committed a total of RM331.5 million to acquire two new companies and three follow-on investments.
In a statement, Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda reaffirmed that Ekuinas was established with the vision to be the partner for growth to create sustainable Bumiputera wealth and participation through private equity investments in Malaysia’s high potential and leading companies.
“This has resulted in the increase in Bumiputera equity ownership of RM5 billion, which is 1.5 times of the capital invested and 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,.”
2018 also saw an active year for Ekuinas with three exits namely Tranglo Sdn Bhd, which generated gross proceeds of RM114.9 million,
We are ready, but it is also up to these companies -- what they see going forward. As for Ekuinas, we are willing to spend between RM30 million to RM300 million per company Syed Yasir Arafat Syed Abd Kadir
achieving an IRR of 26.9 per cent and a money multiple of 2.0 times the capital invested and the Third Party Claims Administrator (TPA) service providers, MediExpress Group and PMCare Sdn Bhd, which generated a minimum IRR of 38.8 per cent and a money multiple of 2.6 times the capital invested.
Syed Yasir Arafat further added, “2018 was a landmark year for Malaysia. Global and local markets were challenging with the economy affected by factors such as weakening global demand and supply-side shocks. Despite the market setbacks, Ekuinas continued to deliver strong performance on our funds.
“Earlier this year, we also announced the launch of Ekuinas Direct ( Tranche IV) Fund, which is part of Ekuinas’ long term investment strategies to continue providing the building blocks for Malaysian companies.”
In 2018, Ekuinas continued to expand its investment portfolio in the manufacturing sector with the acquisition of a controlling stake in Flexi Versa Group Sdn Bhd (FVG) and a 40.4 per cent stake in Exabytes Capital Group (Exabytes). FVG is a local and leading Southeast Asian turnkey and components manufacturer, meanwhile Exabytes is a leading web hosting and cloud service provider across the region.
As Malaysia grows to become part of the global procurement ecosystem, the manufacturing industry will be a key economic driver for the country.
In addition, playing a key role in the growing internet economy is also a prime opportunity for Ekuinas, backed by the increase in internet penetration and digitalisation of businesses across Southeast Asia.
Syed Yasir Arafat continued, “2019 will also see us crystallising our assets under Ekuinas Direct (Tranche II) Fund as part of our prudent investment strategy to secure positive IRR and ensuring the realisation of the fund is done within the expected timeline.
“We will also expand our portfolio with judicious investments and widening our deal criteria to enable us to identify and develop new industry opportunities, as well as continue to create value through active portfolio management and governance at our portfolio companies.”