Government-linked private equity firm Ekuiti Nasional Bhd remains open to interest from third parties for the sale of its stake in Burger King following the change of heart by Brahim’s Holdings Bhd.
“Our focus is to turn around Burger King, we’ll invest in management and in resources to turn around the brand, but if there are interested parties, we are open to divestment.
“In fact, many have stated their interest to invest in Burger King. We are ready to hold further discussions with them to discuss plans for divestment,” said Ekuinas chief executive officer Abdul Rahman Ahmad.
Speaking to reporters following Ekuinas 2014 results announcement, he added that he thinks QSR (quick service restaurants) is a long-term business.
“It’s not just about the resources, it’s about the operational capabilities, and I think a third party could well add value to Burger King. That’s why I think we are very keen on considering and exploring other opportunities.
“Our view is that if there is an interested party who can add value, then I think we’re very happy to do that. Otherwise, I think QSR business as you know has a very long gestation period because it requires scale, you need to open a lot of stores to reach economies of scale,” he said, adding that Ekuinas is “very open to divestment”.
Meanwhile, Abdul Rahman said that Ekuinas aims to list its education arm Ilmu Education Group, by year-end or early next year. “We are looking at listing or probably the sale of a strategic stake hopefully by year-end or early 2016,” he said.
“We try to see opportunities in that particular sector as we haven’t expanded much in that. We have identified a few investments to look at and have spent a considerably amount of time in that sector.
“While its definitely not hospitals, it will be focused on services within the healthcare space,” he said.
For the financial year ended Dec 31, 2014, Ekuinas undertook nine direct and outsourced investments with a total committed capital of RM 605.8 million, the firm said. This makes the total cumulative investments undertaken by Ekuinas (over a five-year period) to 33 amounting to RM2.4 billion.
The Ekuinas Direct (Tranche 1) Fund recorded a gross portfolio return of RM677.1 million for the year, with a gross annualised internal rate of return (IRR) of 19.6% and a net annualised IRR of 15.3%, exceeding the minimum target return of 12% per annum.
Ekuinas’ second fund, Ekuinas Direct (Tranche 2) Fund posted a gross portfolio return of RM148.4 million, with a gross annualised IRR of 31.9% and a net annualised IRR of 19.3%.
Ekuinas’ Outsourced Programme had three new investments amounting to more than RM80 million undertaken by external private equity firms, of which Ekuinas’ committed capital contribution was RM63.7 million.
The firm’s realisation activities also progressed, with RM954.8 million of proceeds realised by its portfolio companies, predominantly raised from the listing of its portfolio company Icon Offshore Bhd.