Investments Went to Fashion Valet Growth Plans, Not Founders, Says PNB
PNB Clarifies Investment in Fashion Valet
Permodalan Nasional Bhd (PNB) says the proceeds of its RM20 million investment into Fashion Valet Sdn Bhd went into the firm’s growth plans, not its shareholders.
Growth Plans, Not Shareholders
“All the investment proceeds went into Fashion Valet to fund its growth plans and not to any of its existing shareholders, which included the founding entrepreneurs,” PNB said in a statement.
Investment Made Using PNB’s Proprietary Fund
“It is important to emphasise that the investment was made using PNB’s proprietary fund and not the unit trust funds under Amanah Saham Nasional Bhd (ASNB) subscribed by the public,” it added.
PNB’s Statement on Fashion Valet Investment
The PNB statement came shortly after national sovereign fund Khazanah Nasional said the divestment of its Fashion Valet investment was “a responsible exit.”
PNB’s Investment in Fashion Valet
The asset manager said its 2018 investment in Fashion Valet, a startup online fashion company, followed a detailed evaluation and due diligence process. At the time, the company had a projected annual revenue growth rate of 60% forecast for the following three years.
PNB’s Support for Bumiputera Firms
PNB said the purchase of its stake in Fashion Valet was in line with Putrajaya’s call for government-linked investment companies to support high-potential Bumiputera firms involved in the new economy, in this case, the digital economy.
Challenges Faced by Fashion Valet
Fashion Valet encountered difficulties following the outbreak of Covid-19 and the ensuing lockdowns, and required capital injection urgently, but PNB and other existing investors were not willing to do so due to the risks associated.
Purchase Offer from NXBT Partners
It was then that NXBT Partners offered to inject new capital though at a much lower valuation, and to take over the company. NXBT Partners is an investment holding company controlled by Afzal Abdul Rahim, the CEO of TIME dotCom Bhd.
PNB’s Decision
“Given PNB’s small stake and that the investment had been substantially provided, it was decided to accept the purchase offer to allow Fashion Valet to move forward,” said PNB.
Conclusion
Despite the loss of its investment, PNB said this should be viewed in light of the RM337 billion in investment assets it managed, as well as the RM16.4 billion in investment income generated in the 2023 financial year.
FAQs
Q: What did PNB invest in Fashion Valet?
A: PNB invested RM20 million in Fashion Valet Sdn Bhd.
Q: How did PNB decide to exit its investment in Fashion Valet?
A: PNB accepted a purchase offer from NXBT Partners at a much lower valuation to allow Fashion Valet to move forward.
Q: What is PNB’s outlook on its investment in Fashion Valet?
A: PNB views its loss of investment as part of its overall performance, considering its RM337 billion in investment assets and RM16.4 billion in investment income generated in the 2023 financial year.