New foreign venture capital company starts operation

JAKARTA (JP): PT Malindo Ventura Nusantara, a new venture capital company partly controlled by Renong Nusantara Sdn. Bhd. of Malaysia, began providing financial support for medium-size companies yesterday.

Malindo's start up was officially launched during a ceremony at the Jakarta Hilton Convention Center.

"We are the 15th capital company to operate in Indonesia to support medium-size companies in terms of finance," the company's executive director, Sudaryanto Sudargo, said.

A venture capital company is an institution which provides financial assistance through an equity participation scheme. Based on an Indonesian government ruling, the participation is limited to a 10-year period of cooperation, during which the venture capital firm should be in a position to divest its shares to the clients.

"Malindo Ventura plans to increase equity participation by up to 49 percent of the total capital owned by clients," Sudaryanto said.

The company has also set a ceiling of funds needed by its clients at between Rp 10 million and Rp 20 million, he added.

"The main targets of our investments are medium-scale clients which are export oriented," he said.

"And those which are eligible for our funding scheme should be companies which are not listed on the capital market," he said.

According to Sudaryanto, the establishment of Malindo Ventura is based on a bilateral commitment between Minister of Finance Mar'ie Muhammad and Malaysia's Deputy Prime Minister Anwar Ibrahim during their July 2 meeting in Malaysia.

As a follow up of their commitment, both governments agreed to establish Malindo Ventura, which was 50 percent owned by Renong Nusantara, 43 percent by the state-owned Bank Rakyat Indonesia (BRI) and the remaining seven percent by Pension Fund foundation, PT Sarinah Pasar Raya, PT Nugraha Santana and investing individuals. (fhp)