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Malaysia's COPE Private Equity launches $41m program

Investments will back local businesses needing capital to overome coronavirus

SINGAPORE -- Malaysia's COPE Private Equity has launched an equity investment program to provide capital to domestic businesses hurting in the wake of the COVID-19 outbreak.

The program, dubbed Bridge Over Troubled Water, or BOW, will provide 20 million to 40 million ringgit ($4.6 million to 9.2 million) to Malaysian companies in need of capital. The program, which will provide equity and quasi-equity financing, will not invest in startups, project financing, commodities, property and non-Shariah businesses, COPE said.

The fund will be supported by COPE's institutional investors, said founder Azam Azman.

"Many businesses shut for a period of one month will require significant capital to resume operations, and as private equity investors we expect a busy end to 2020," said Azman.

The total amount invested in BOW is about 180 million ringgit ($41.4 million), DealStreetAsia has learned.

Other than providing capital, COPE will work with selected entrepreneurs on a three-year strategic plan and help them strengthen their middle management, human resources and information technology processes.

COPE said it expects to support companies, especially those that satisfy important consumer needs, in areas such as energy, health care, education, food production, and in peripheral areas such as medical devices and engineering maintenance services.

COPE plans to maintain its investment strategy after the COVID-19 pandemic is over, its founder said, but will stress sustainability and strong cash flow management among its portfolio companies. "Given our past experience during the downturns in 1997 and 2008, a laser focus on cash flow is important to ensure portfolio companies survive the crisis," Azman added.

Established in 2005, COPE is a middle-market private equity firm with 600 million ringgit of assets under management. The company focuses on Malaysian businesses that operate on principles of Shariah, or Islamic law.

According to its website, COPE's portfolio includes aluminum and zinc die-casting business STX Precision Group, fruit retailer MBG Holdings, school uniforms maker and distributor My Sutera Holdings, IoT company MDT Innovations and laundromat chain Cleanpro.

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