Mdv corp presentation for m de-c johor

MDV as an Innovative Technology Financier - Presented at: Moving Forward – Enabling the Growth of ICT in

Malaysia

20th June 2012

Contents

CONTENTS

2

Section 1

MDV’s Processes and ProductsSection 2

Background on MDV

MDV Success StoriesSection 3

Pre-amble Impact of MDV Programs

3

MDV’s Achievements

The total value of business facilitated by MDV via its programs is estimated at close to RM15 billion

MDV has financed 300 ICT/Biotech companies, of which approx. 72% were SMEs

MDV disbursed RM6.25 billion in financing for projects that have employed approx. 15,000 workers, with fund velocity of 3.7 times,

MDV financed key government e-Infrastructure, such as ePerolehan, eTanah, eCourts, eSecurity systems, and Defense systems

Contents

CONTENTS

4

Section 1

MDV’s Processes and ProductsSection 2

Background on MDV

MDV Success StoriesSection 3

Pre-amble Impact of MDV Programs

5

About MDV

Wholly owned by the Minister of Finance Inc, Malaysia;

Started operations in 2003 with initial funding from JBIC, Japan dedicated for ICT;

Total fund size of RM 4 billion to finance ICT, biotechnology and Green energy projects;

First-ever Lending Program in Asia developed specifically to drive the ICT, biotechnology and green energy;

Dual Role – Innovative Financier and Development Facilitator for ICT, biotechnology and green energy sector;

Value chain approach in financing and developing the industry.

Initial Paid-up Capital RM50 million, increased to RM100 million in 2007 and again to RM250 million in 2010.

BACKGROUND

Section 1

6

Funding Sources and Lending Direction

RM1.5 Billion Islamic Medium Term Notes (iMTN)

MDV Second Fund

ICT Sector

Biotech Sector

RM1.6 Billion Term Loan from JBIC

MDV First Fund

ICT Sector

MOF had approved RM2.5 billion for MDV Second Fund of which RM1.0 billion has been drawn.

Green/Clean Sector

Section 1

7

MDV ‘s Technology Focus

INFORMATION & COMMUNICATION

TECHNOLOGYBIOTECHNOLOGY GREEN

TECHNOLOGY

Technologies for gathering, storing, retrieving,

processing, analysing, and transmitting information

Use of living organisms or biological techniques to

provide chemicals, drugs, food and services

Products and services that (1) provide superior

performance competitively, (2) reduce or eliminate negative environmental impacts and (3) improve

productive and sustainable use of resources

2002 2008 2011

Section 1

8

When MDV can finance

Se

t Up

(In

itia

tion

Sta

ge)

Exp

an

sio

n S

tag

e

MDV(Loans)

Banks(Loans)

Incubator(Equity)

Venture Capital(Equity)

Grants

Commercialisation

Section 1

9

NationBuilding

ProfitMaximisation

Business Objectives

LowRisk

HighRisk

R

isk

Por

tfol

ioHigh Risk

Nation BuildingHigh Risk

High Returns

Low RiskNation Building

Low RiskHigh Returns

MDV in the Financing Ecosystem

VentureCapital

CommercialBanks

Development FIs

DevelopmentAgencies

Section 1

10

MDV Processes

Pre-Assessment& Support

Pre-Due Diligence& Due Diligence

Decision DocumentationFirst Drawdown & Disbursement

Issuance of Letter of Offer DisbursementSubmission of

Application

Fulfillment of CP &Execution of

Security Documents

Discussion & Application Support Approval

Assessment & Evaluation

Facilities Agreement & Security Documents

Section 1

Time taken to process (application to decision letter):

Standard Financing 30 working days

Small Contract/Project financing

Special Programs

14 – 21 working days

7 - 14 working days

Contents

CONTENTS

11

Section 1

MDV’s Processes and ProductsSection 2

Background on MDV

MDV Success StoriesSection 3

Pre-amble Impact of MDV Programs

12

Minister of Finance, Inc.

Malaysia Debt Ventures

Berhad

99.9%

Authorised Capital: RM500 millionIssued and Paid-Up: RM250 million

BOARD COMMITTEES:

Board Financing Committee

Board Investment Committee

Board Risk Management Committee

Board Audit Committee

Board Procurement Committee

Board Remuneration and Audit Committee

BOARD OF DIRECTORS

Md Zubir Ansori YahayaMD/CEO

Risk & Credit Mgmt

Internal Audit

Federal Land Commission

1 share

Business & Corp Services BTA

Finance & Admin

Human Resource

Corporate and Organization Structure

Legal & Sec. Asset Mgmt

Section 2

13

Our Criteria

•Public or private limited company incorporated in Malaysia

•Minimum paid-up share capital of RM100,000

•Minimum five (5) employees

•No restriction on foreign shareholding

•With ICT/Biotech/ Green/Clean Tech contracts (local & foreign)

Eligibility Criteria

•Loan Size - financing up to 85% of contract value or total project cost, with loan size up to RM120 million

•Loan Tenure - Repayment period between 1, 5, 10 years

•Loan Repayment - Flexible repayment terms that are aligned to the cash flow of your project

•Collateral - Do NOT necessarily require hard and cash collaterals

•Equity Structure - NO specific requirement

ApplicationCriteria

•Management Risk

•Technical Risk

•Financial Risk

•Legal Risk•Collateral

Risk •Performa

nce Risk

EvaluationCriteria

Section 2

14

What MDV Currently Offers

•MDV Revolving Project Loans are structured to finance implementation of contract-backed projects to deliver ICT, Biotech and Green Tech as well as high-growth solutions.

•Up to 85% of the value of the contract, or total cost of project, can be financed.

•Loan sizes from RM2 million up to RM50 million can be considered, with repayment periods of between up to 5 years (ICT) and 10 years (Biotechnology/GreenTech)

REVOLVING PROJECT LOANS

•MDV Open-ended Project Loans are structured to finance exceptional open-ended (i.e. non contract-backed) projects, where likelihood of achieving project success and profitability is high.

•Include Build-Own-Operate (BOO) Build-Operate-Transfer (BOT), Concession etc

OPEN-ENDED PROJECT LOANS

•MDV Partner Bank Facilities involve provision of guarantee (bank/ performance etc. and trade facilities (letters of credit) by Partner Banks, fully backed against MDV's guarantees.

•These facilities complement the Project Loans provided directly by MDV.

PARTNER BANK FACILITIES

•Loan sizes from RM250,000 up to RM2 million can be considered, depending on risk profile, with repayment periods of up to five years

•MDV Small Contract/ Project Financing is designed and customized for companies with ICT, Biotech and GreenTech contracts/projects from Government, MNCs, etc or have a commercialized product serving a ready market.

•Approval within 14 to 21 days

•Financing up to 85% of contract value

•Fixed interest rate of between 6 to 8% p.a. on daily rest and flexible repayment

SMALL CONTRACT FINANCING

Section 2

15

How MDV Finances Contracts

CustomerPROJECT/

CONTRACTSPONSOR

Project Deliverable

1

2

3

4

2Financing of total project cost up to 85% of Contract value

5

6

3 Customer completes and delivers ICT project/contract

1Sponsor awards contract/project to Customer; Contract Proceeds is assigned to MDV 4

Project/Contract Sponsor remits Contract Payment as Loan Repayment

5 Customer receives partial contract payment

6Customer receives balance contract payment when loan repaid

Section 2

16

MDV-MSC Malaysia ICT Adoption ProgramSection 2

17

Financing Tracks

FINANCINGTRACKS

Customer Financing Vendor Financing

MDV will finance the customers of MDV’s pre-identified panel of ICT service/ product providers (viz. MSC Companies identified in collaboration with MDEC); and Vendor Financing

MDV will extend working capital financing to the pre-identified panel of ICT service/ product providers identified in collaboration with MDEC

Section 2

18

SME Eligibility

•An SME incorporated under the Companies Act 1965 in the eligible sectors (TRACK 1 ONLY)

Sdn Bhd

•Pre-identified panel of ICT service/ product providers identified in collaboration with MDEC

Selected MSC Companies

•For Eligible SMEs to procure, install and/or commission products and services of eligible IT systems

Procure IT Systems

•SME definition as per National SME Development Council;R M100,000 minimum share capital; minimum of five (5) full-time employees; 51 % Malaysian shareholding

Company Requirements

•Minimum of three (3) years operating track record; growth in turnover and profitability in past 3 years; positive NTA in 3 years

Financial Requirements

•Fixed charge on assets financed; Debentures; Corporate and Directors guarantee; Assignment of medium/long-term contract proceeds

Collateral Requirement

Section 2

19

Vendor Financing Option for MSC Malaysia Status Companies

Customer

MDV provides financing for purchase of MSC Malaysia status company products/

services by customer

MSC Malaysia status company sells products services to customers on cash basis

Customer purchases products/ services from MSC

Malaysia status company on cash basis (financed by

MDV)

Customer repays financing to MDV on deferred basis

with interest/ profit

Section 2

20

What MDV Currently Offers

•A special financing scheme in collaboration with Telekom Malaysia for its HSBB vendors

•Loan size from RM250,000 to RM5 million

•Approval within 7 days

•Financing up to 85% of contract value and a financing period of up 5 years.

•Profit rate of 6.75% per annum, on daily basis and flexible repayment periods

SPECIAL PROJECT FINANCING PROGRAMS

TM JKH VENDOR FINANCING

•A special financing scheme extended to companies that have secured government ICT/ ICT related/ BioTech or Green Tech projects

•Loan Size up to RM5million

•Approval within 14 days

•Financing up to 85% of contract value and a financing period of up 3 years.

•Profit rate of 6.75% per annum, on daily basis and flexible repayment periods

SPECIAL PROJECT FINANCING PROGRAMSGOVERNMENT DIRECT

CONTRACT

Section 2

21

What MDV Currently Offers

•A special financing scheme to promote Bumiputera uptake in the industry.

•In collaboration with MOSTI and Biotech Corp

•Total Loan Size : RM20million (as at 31st July, MDV approved RM18.35mil)

•Loan size up to RM5 million

•Financing up to 85% of contract value and a financing period of up 5 years.

•Profit rate of 3% per annum, on daily basis and flexible repayment periods

SPECIAL PROJECT FINANCING PROGRAMS

BUMIPUTERA BIOTECHNOLOGY & BIO-

INDUSTRY DEVELOPMENT FUND

(B3DF)

•A special financing scheme extended to early stage and/or pre-commercialise companies

•In collaboration with MOF Inc.

•Total Loan Size : RM12 million (2011) and RM28 million (2012)

•Loan size up to RM2 (Venture Project Line) and up to 5 million (Asset Project Line, Working Capital Project Line and Contract Project Line/Small Contract Project Line

•Financing up to 85% of contract value and a financing period of up 5 years.

•Profit rate of between 6 to 8% per annum, on daily basis and flexible repayment periods

SPECIAL PROJECT FINANCING PROGRAMS

RMK10 PRE-COMMERCIALISATION

FINANCING

Section 2

22

Differences with Banks

BANKS

Rates – Risk Based Variable Rates - COF or BLR based Collateral

- Hard Collaterals (All)- Soft Collaterals - CGC Guarantees

DD based on 5 Cs of Credit- Character- Capital- Capacity- Collateral- Conditions

Sectoral exposure- Matured sectors

Source of Funds - Deposits

Payment terms - Accrual interest- Scheduled payment

Fees & Charges- Profit motive

MDV

Rates – Risk Based Fixed Interest Rates (7% to 8.5% p.a.) Collateral

- Hard Collaterals (Selective)- Soft Collaterals

DD based on 5 key areas- Management- Technical- Legal- Financial - Collateral

Sectoral exposure- Emerging sectors

Source of Funds - Capital Market- Govt. of Malaysia

Payment terms - Upfront interest- Cash flow based payment

Fees & Charges- Cost recovery

Section 2

23

Who and What MDV Finances

•All Costs (equipment/infrastructure/hardware, software, operational costs) directly incurred for the project

•Up to the lower of 85% of the contract value or Actual Cost

•Projects should be Malaysia-centric. Financing of overseas project subject to MDV overseas financing guideline

What MDV Finances

•Malaysian companies that PROVIDE high value added technology solutions

•Malaysian companies* that PROCURE high value added technology solutions

•Malaysian companies* that PROVIDE GOODS to technology companies for producing high value added technology products

Who MDV Finances

Section 2

Contents

CONTENTS

24

Section 1

MDV’s Processes and ProductsSection 2

Background on MDV

MDV Success StoriesSection 3

Pre-amble Impact of MDV Programs

25

MDV Portfolio by Sectors

55308375.72500016%

870642991.88090188%

67734231.19957%

Total MDV Portfolio based on ICT, Biotechnology and Renewable Energy sectors

Biotechnology Information technology and services Renewable Energy

Section 3

26

SME ICT & Biotech Sector• MDV launched Small Project Financing Facility (loans < RM2 million) in July 2007,

providing approval within 14 days.• Since inception up to 31 January 2012, MDV approved more than 243

applications cumulatively since 2003, totaling more than RM78 mln

Green Tech Sector• Sectors supported include Energy Generation/ Storage /Infrastructure/ Efficiency;

Transportation; Water & Wastewater; Air & Environment; Recycling & Waste; Materials; Agriculture & Manufacturing/ Industrial

• As at 31 January 2012, MDV approved 12 applications comprising of 11 companies, totaling RM136 mln

ICT Sector• Sectors supported include Communications/Network Media; Electronic/Semi-

Conductor; Application, Content & Multimedia; Internet; and IT• As at 31 January 2012, MDV approved 462 applications comprising 304 ICT

companies cumulatively since 2003, totaling RM4,890 mln

MDV Role – Innovative FinancierSection 3

Biotech Sector• Sectors supported include Natural Products; Medical Devices/Diagnostics;

Contract Manufacturing/Research; Industrial Biotechnology; Bio-Informatics• As at 31 January 2012, MDV approved 35 applications comprising 30 Biotech

companies cumulatively since Biotech Product launch in May 2008, totalingRM313 mln .

27

A Sample of MDV Achievements & Success Stories

AQUARIA KLCCWORLD-CLASS AQUARIUM

WITH 95,000 VISITORS MONTHLY

ePEROLEHANGOVERNMENT

ePROCUREMENT SYSTEM

eTANAHINTEGRATED LAND

MANAGEMENT SYSTEM FOR LAND OFFICES

DATA CENTERSDATA CENTERS AND IP

TRANSIT SERVICE

IT ISMALAYSIA-WIDE TRAFFIC MANAGEMENT SYSTEM

MAMPUDEVELOPMENT OF

GOVERNMENT’S ICT SECURITY

Digital Content3D ANIMATED FEATURE FILM

‘RiBBIT’

3D ANIMATION ‘UPIN & IPIN’ AND ‘GENG:

PENGEMBARAAN BERMULA’

PRS (Police Reporting System)AUTOMATION OF POLICE

PUBLIC COMPLAINTS REPORTING STRUCTURE

Wireless BroadbandWIMAX WIRELESS BROADBAND

WITH 350,000 SUBSCRIBERS

DIGITAL CONTENTGLOBAL COMPUTER AND VIDEO

GAME DEVELOPMENT

media infrastructure companyINDOOR DIGITAL MEDIA (IDM) FOR BANKS AND GOVT OFFICES

Transportation ePurseAUTOMATED REVENUE

COLLECTION, AND ePAYMENT SYSTEMS

Biomass EnergyBIOMASS-BASED BOILER

SYSTEMS FOR ALL SECTORS

Advanced Telecoms InfraADVANCED COMMUNICATION

TECHNOLOGIES AND SOLUTIONS

Semi-ConductorMANUFACTURING OF ICs FOR SEMI-CONDUCTOR INDUSTRY

VSAT CommunicationsPROVISION OF VSAT

TECHNOLOGY & SOLUTIONS

Military Flight SimFLIGHT SIMULATOR AND

MISSION CONTROL SYSTEMS

GOVERNMENT SYSTEMSFINANCIAL MANAGEMENT

SOLUTION SOFTWARE

Mobility/ID AuthenticationSMARTCARD AND

BIOMETRICS VERIFICATION DEVICES

Section 3

MALAYSIA DEBT VENTURES BERHAD (578113-A)

Level 5, Menara Bank Pembangunan, 1016, Jalan Sultan Ismail, 50250 Kuala Lumpur.

General Line: +60 3 2617 2888 Fax : +60 3 2697 8998Email: [email protected]: www.mdv.com.my

Thank you