MTDC to have eq­uity op­tion for its funds

> It will en­able tech­nol­ogy de­vel­op­ment agency to take up stakes in re­cip­i­ent com­pa­nies

The Sun (Malaysia) - - SUNBIZ - BY EE ANN NEE

KUALA LUMPUR: Malaysian Tech­nol­ogy De­vel­op­ment Cor­po­ra­tion Sdn Bhd (MTDC) plans to stream­line all its funds by the first quar­ter of next year with an eq­uity op­tion for MTDC to take up a stake in re­cip­i­ent com­pa­nies.

MTDC man­ages six funds amount­ing to RM1.8 bil­lion, specif­i­cally the Com­mer­cial­i­sa­tion of R&D Fund (CRDF), Tech­nol­ogy Ac­qui­si­tion Fund, Busi­ness Start-Up Fund, Busi­ness Growth Fund, Bu­mi­put­era Ex­pan­sion Fund and Ha­lal De­vel­op­ment Fund.

MTDC CEO Datuk Norhalim Yunus said among the six funds, only CRDF does not have an eq­uity op­tion for MTDC cur­rently.

“All our other funds are in the form of eq­uity and prom­is­sory notes and only CRDF are in the form of grant. It is nat­u­ral that we stream­line all our funds to have op­tions for us to take up an eq­uity po­si­tion, in line with all our funds. It’s not some­thing dras­tic, only 12.5%,” he told a press con­fer­ence at the MTDC Road­2Fund­ing Cen­tral Re­gion 2016 event here yes­ter­day.

CRDF gives out grants of up to 70% of fund­ing re­quire­ments. Start­ing this year, CRDF re­cip­i­ents are re­quired to give back 12.5% of the funds they re­ceive in kind to MTDC.

“If they get RM1 mil­lion, 12.5% or RM125,000 are given back in kind whether in the form of CSR (cor­po­rate so­cial re­spon­si­bil­ity), prod­ucts or time as a men­tor to our en­trepreneurs. But we plan to change this. MTDC as the fund man­ager wants to have the first op­tion to con­vert 12.5% value of the fund into the form of eq­uity,” said Norhalim.

He said the 12.5% in the form of prom­is­sory notes al­lows MTDC two op­tions, firstly if MTDC de­cides not to con­vert this into eq­uity, re­cip­i­ents will need to pay the 12.5% cash to MTDC. Se­condly, if the re­cip­i­ent com­pany is suc­cess­fully listed, MTDC can sell its shares in the open mar­ket and the money can go back to the fund.

“These are pos­si­bil­i­ties that we are eval­u­at­ing to add value to the fund and to con­trib­ute to a longer last­ing re­la­tion­ship be­tween us and the en­trepreneurs,” said Norhalim.

He said the move would be good for the fund re­cip­i­ent com­pa­nies, as hav­ing an es­tab­lished cor­po­rate in­vestor will be help­ful when they want to raise funds or when deal­ing with overseas part­ners.

“We add value into the com­pany by be­ing their share­holder and they con­trib­ute back to the public money be­cause they have got the funds.”

Through this, MTDC ex­pects to have closer col­lab­o­ra­tion be­tween re­cip­i­ents and MTDC as well as be­tween re­cip­i­ents them­selves.

MTDC is a wholly owned sub­sidiary of Khaz­anah Na­sional Bhd and has been the key player in com­mer­cial­i­sa­tion and man­age­ment of gov­ern­ment fund­ing since the 7th Malaysia Plan.

MTDC ap­proved RM102.35 mil­lion in funds for this year, and aims to ap­prove an­other RM45 mil­lion by year-end. It has an al­lo­ca­tion of RM900 mil­lion un­der the 11th Malaysian Plan un­til 2020.

Be­sides fund man­age­ment, MTDC also pro­vides an in­te­grated sup­port ser­vices for techno­preneurs, which in­cludes ad­vi­sory ser­vices such as men­tor­ing, soft-land­ing, brand­ing, fund rais­ing, in­ter­na­tional col­lab­o­ra­tion and net­work­ing.

MTDC’s com­mer­cial­i­sa­tion ecosys­tem has pro­vided fund­ing and as­sis­tance to over 500 tech­nol­ogy-based com­pa­nies that are in­volved in a wide range of ac­tiv­i­ties rang­ing from the agri­cul­tural sec­tor to ICT.

... Labuan Mem­ber of Par­lia­ment Datuk Roz­man Isli (left), Star­bucks Malaysia and Brunei man­ag­ing di­rec­tor Syd­ney Quays (cen­tre) and Malaysia Air­ports Hold­ings Bhd man­ag­ing di­rec­tor Datuk Badlisham Ghaz­ali pos­ing with their cap­puc­ci­nos af­ter a cof­fee test­ing event held in con­junc­tion with the open­ing of Star­bucks Malaysia's 226th store in Labuan yes­ter­day.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.