Friday 29 Mar 2024
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KUALA LUMPUR (Aug 18): Ekuiti Nasional Bhd (Ekuinas) has divested its 20% stake in cosmetics firm Alliance Cosmetics Group (ACG) to Navis Capital Partners (Navis) for RM61.8 million.

In a statement today, the government-linked private equity fund management company said both parties inked a conditional sale agreement between both parties for the divestment.

Navis, which undertook the joint investment with Ekuinas in 2010 via a special purpose vehicle (SPV), will own 80% of ACG following Ekuinas' divestment. The divestment generated gross proceeds of RM61.8 million, with a minimum internal rate of return (IRR) of 9% and money multiple of 1.55 times of capital invested, including dividends received.

In a statement, Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said it is divesting the stake to Navis as it has the capacity and historical knowledge of ACG to continue nurturing the company to further strengthen its performance in the near future.

"Despite challenging market conditions throughout Ekuinas' ownership, ACG has successfully expanded into Indonesia and Philippines," he said.

"Its in-house brand Silkygirl also continues to be one of the leading mass market colour cosmetics and fragrance players in Malaysia, Singapore and Brunei, whilst its team endeavoured to develop new product lines," he added.

ACG was Ekuinas' maiden investment, undertaken jointly with Navis in 2010. Ekuinas' total investment of RM39.9 million translated into an effective 25% equity in a joint SPV that controls 80% of ACG.

Further to the sale, Navis has agreed that upon Ekuinas' exit from ACG, Ekuinas could potentially receive additional proceeds from the divestment via a sharing mechanism, depending on the final consideration paid and subject to certain thresholds being reached.

Ekuinas chief executive officer Syed Yasir Arafat Syed Abd Kadir said the divestment exercise is in line with Ekuinas' move to crystallise its investments under Ekuinas Direct (Tranche I) Fund, as part of its prudent investment strategy to secure positive IRR.

"The sale marks Ekuinas' sixth divestment which brings the company's total realisation proceeds to more than RM1 billion, including the partial divestment of Icon Offshore Bhd, after nearly seven years in operations," he said.

"Ekuinas is now focused on crystallising assets under the maiden fund, Ekuinas Direct (Tranche I) Fund, as the company is looking to close it by end-2017," he added.

The Ekuinas Direct (Tranche I) Fund recorded a gross portfolio return of RM591.3 million for a gross IRR of 14.8% per annum while its second fund, Ekuinas Direct (Tranche II) Fund, posted a gross portfolio return of RM133.3 million at a gross annualised IRR of 13%.

Its third tranche and the biggest of all Ekuinas' five funds with a total capital commitment of RM1.5 billion has had an encouraging start with 15.3% or RM229.8 million committed in FY15, the statement read.

 

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