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EMIA in search for strategic partners to co-invest in CLM countires

EMIA

EMIA

Emerging Markets Investment Advisers Pte Ltd (EMIA) has recently announced the final closing of its latest fund, the Cambodia-Laos-Myanmar Development Fund II (CLMDF II) at US$64 million.

EMIA is the investment arm of Emerging Markets Group Holding, a business consulting and investment firm. The fund will focus on investing in profitable operating businesses and greenfield opportunities with great potential.

Meanwhile, EMIA is also scouting for experienced strategic partners for co-investment opportunities where it seeks to take a 25 to 40 percent minority stake in businesses.

“We seek meaningful minority stakes, so 25 to 40 percent is probably the sweet spot. We want stakes where we have a role to play in governance,” said Trent Eddy, the Chief Investment Officer of EMIA.

EMIA has already made six investments in Cambodia, Laos, and Myanmar using its second vehicle, and is currently in active discussions with several companies for a longer term commitment in Myanmar which may require more than 10 years before reaping the benefits of its PE investment.

“We have a long-term view and we are in the view that a good market for PE investments will evolve over that time with like-minded PE players,” said Eddy.

However, EMIA has yet to reveal the number of companies from Myanmar that the second vehicle is looking at investing into.

“We can in principle invest in tickets up to about US$9 million but our target size for a first investment is usually in the range of US$4 to US$5 million,” said Eddy.

“However, if we see potential in the company that deserve a follow-on investment, we would prefer to close smaller deals in the US$1 to US$3 million range.”

This is in order to retain some capacity to join in the follow-on investments if the company performs well and requires more fund to sustain its growth.

So far, EMIA investment portfolio in Cambodia and Laos include Cambodia’s leading microfinance institution AMIK, premium quality rice producer BRICo, employee benefits program provider iCare Benefits, and Planet Online, an internet service provider in Laos.

One of the investors in EMIA is the International Finance Corporation (IFC) which is the private lending arm of the World Bank Group that contributed US$7.5 million for its CLMDF II which was set up in 2015.

According to Eddy, active discussions are also underway for possible exits in the future. Looking at the investment firm’s funding geographic history, Cambodia is the best-developed for exit out of the three countries.

Minna Padi Sekuritas to acquire 51 percent of Bank Muamalat

Bank Muamalat
Minna Padi Sekuritas to acquire 51 percent of Bank Muamalat for US$333 million

Bank Muamalat

IDX-listed Minna Padi Investama Sekuritas announced on Monday saying that it is planning to acquire a majority stake in Bank Muamalat.

The securities firm is said to be a standby buyer and will use IDR 4.5 trillion (about US$333 million) to purchase Bank Muamalat’s 80 billion extended new shares.

Minna Padi Investama Sekuritas will then subscribe to Muamalat’s unabsorbed shares and become its 51 percent shareholder.

“The purpose of the transaction is to allow the company’s business expansion in the Islamic banking sector,” Minna Padi explained.

In fact, it is looking to enhance Kosikornbank’s presence in Southeast Asia, China, Japan, and South Korea which are considered a crucial market for Thai business.

Backed by Indonesian businessman Setiawan Ichlas, Minna Padi plans to fund the buyout through its own rights offering – selling 5 billion shares at a price yet to be disclosed.

But if the deal was to follow the firm’s current stock price which was IDR 1,410 at Friday’s market close – Minna Padi could raise up to IDR 7 trillion (about US$519 million).

After the acquisition, the firm plans to use the remaining capital to invest in other companies and strengthen its capital structure.

For now, Minna Padi’s extraordinary general shareholder meeting will be held on November 22 to seek an approval for the rights issuance plan.

If the company’s shareholders forgo their rights, they will see their ownership diluted by up to 30.7 percent.

Founded in 1991, Bank Muamalat is Indonesia’s first Islamic bank. It has 338 offices operating across Indonesia, along with a presence in Malaysia.

The bank’s main shareholders include Islamic Development Bank, Kuwait’s Boubyan Bank, Saudi Arabia’s Atwill Holdings Limited, and National Bank of Kuwait.