Government, JBIC in talks on RM1.5b fund for MDV

KUALA LUMPUR: Having allocated RM350mil to Malaysia Debt Ventures Bhd (MDV) under the Ninth Malaysia Plan, the government is in negotiations with Japan Bank for International Cooperation (JBIC) for additional funding of RM1.5bil for the company, said Second Finance Minister Tan Sri Nor Mohamed Yakcop.

The fund was important to ensure MDV continued to play its key role of bridging a crucial financial gap in the information and communications technology (ICT) industry that would bring Malaysian innovations to commercial fruition, he said at the launch of MDV’s rebranding exercise yesterday.

Tan Sri Nor Mohamed Yakcop (left) and MDV chairman Datuk Dr Abdul Samad Alias at the launch of MDV’s rebranding exercise. – BERNAMApic

Nor Mohamed said the Finance Ministry was spearheading efforts to raise up to RM2bil for MDV. The company has been entrusted to manage a RM1.6bil soft loan from the Japanese government through JBIC, which MDV expects to completely disburse by the end of the year.

Nor Mohamed said the rebranding exercise was important as it would further boost venture capital in a knowledge-based economy. “Many ICT companies can come up with good ideas for new products, solutions or investments, but conventional banks still find it hard to disburse loans to these companies based on just a good idea, as they always require collateral,” he said.

On reports that the Employees’ Provident Fund (EPF) had made an offer to buy Utama Banking Group Bhd’s 32.8% stake in Rashid Hussain Bhd (RHB) for RM1bil, Nor Mohamed said any commercial decision taken by the fund to raise its stake in RHB was fine with the government.

“EPF already has a stake (in RHB). Any commercial decision by EPF (to raise the stake) is fine with us,” he added.

MDV chief executive officer Mohd Zubir Ansori Yahaya said after the launch that the government’s funding target of RM2bil was in line with MDV’s needs for the next five years. The company hopes to disburse about RM500mil of funds annually.

Zubir also said the company was targeting a 12%-15% increase in net profit to RM12mil for the financial year ending March 31, 2007, and that MDV was looking at other priority areas such as biotechnology.

“We want to ensure Malaysian biotechnology companies can sustain their businesses beyond the research and development stage,” he added.

-The Star