Business

Monday July 20, 2009

Goldis still open to new investment opportunities

By ELAINE ANG


KUALA LUMPUR: Private equity investment company Goldis Bhd’s strategy in the current tough economic environment is to consolidate and grow its existing stable of companies, but it has not completely shut the door on new investments, said head of corporate investments Colin Ng.

“In such times, we want to maximise the value of our existing businesses. Every time we start a new business, it will suck up cash.

“In a downturn situation, we need to get as much operating cash and profit from our existing businesses as possible,” he told StarBiz.

Ng said although the group had not gone “fishing” for new investments, it was still open to new investment opportunities and had put out word of its intentions.

“We have yet to come across any interesting ventures so far this year but we are trying to shy away from very greenfield projects, that is, ideas that are still on paper, as the gestation time is longer,” he added.

Goldis, which assumed the listed status of property company Tan & Tan Developments Bhd in 2002, is the only private equity investment company listed on Bursa Malaysia.

Since then, the group’s private equity investments have grown to some 38% of total assets of RM1.41bil in the year ended Jan 31, 2009 (FY09) versus about 25% in FY03.

Its investment in associate IGB Corp Bhd comprised the balance 62% of total assets in FY09.

Goldis is the single largest shareholder of property conglomerate IGB with a 27.8% stake, with IGB contributing some RM50.5mil to Goldis’ net profit for FY09.

Its private equity investments locally include Hoepharma Holdings Sdn Bhd, Macro Kiosk Bhd, Macro Lynx Sdn Bhd, Protech Yu (Asia) Sdn Bhd and G Tower Sdn Bhd while Crest Spring (Shanghai) Co Ltd and Tianjin Manax Natural Fibre Thin Film Co Ltd are in China.

Most of the group’s investments have done fairly well so far with plans to grow further.

For example, Hoepharma, which is in the pharmaceutical business, is expanding overseas while Chinese water treatment company, Crest Spring, has recently signed a third build, operate and transfer concession agreement for a sewage treatment plant in Zou Cheng Industrial Park, Shandong Province, China.

G Tower, the group’s Grade A++ office building in the Kuala Lumpur city centre and slated to be completed and operational in the fourth quarter, is expected to have a good take-up rate.

The group’s newest investment, the aquaculture business under Protech Yu, may break even in FY10 as its eco aquaculture park in Kuala Kubu Baru has been completed with two new investors planning to build farms within the park.

“Our plan is to have a few more eco aquaculture parks in the country preferably one each in the southern and northern regions by next year.

“We are also looking at setting up farms overseas and are looking at China in the medium term,” Ng said.

In efforts to improve people’s lifestyle, Goldis’ investments are focused on life sciences, information and communications technology, water/wastewater treatment, investments in emerging markets and harmful bacteria and chemical-free organic aquaculture.

“Our investment model is to invest in new ventures and concepts. We invest in entrepreneurs with the ability to grow the group.

“We are opportunistic and if someone has a bright idea, scaleable model and green slant which fits into our investment philosophy, we will invest,” Ng said.

Traditionally, Goldis will take a majority role in the investment by funding the investment as well as providing management services and support.

“We will also cap our exposure to any one company in the private equity side to RM20mil as anything above that would need board approval.

“The rationale is once we have pumped in so much into the business it should at least start to be self-financing. It is a prudent strategy for someone to pull the handbrake. We need to see if we still want to be in the business or not,” Ng said.

Goldis has a cash pile of RM67mil for investments as at FY09.


GOLDIS : [Stock Watch] [News]


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