Tune Money mulls second share sale

The company may place out up to 10 per cent of new shares to any interested parties, which may be local or international investors next year

By Chong Pooi Koon

Published: 2007/11/18

TUNE Money Sdn Bhd, Malaysia's first "no-frills" provider of financial products, may raise more money through private equity next year to support its expansion, its chief said.

Chief executive officer Tengku Zafrul Aziz said the privately-held company, which has a paid-up capital of RM20 million, is looking at a second round of private equity funding early next year.

It may place out up to 10 per cent of new shares to any interested parties, which may be local or international investors.

In addition, he said, the existing shareholders will need to put in at least RM20 million more in the next two years to grow the company before a planned stock market listing in 2009.

"The current shareholders have put in a lot of money and when we reach certain goals, we think we can go to the private quity market and raise more money," he said in an interview in Kuala Lumpur.

"We can also borrow from the banks, but being in the services sector, we have no tangible collaterals such as planes or factories, so the ability to gear is not as good," Zafrul said.

Tune Money, which sells cheaper and simpler financial products through the Internet, needs to invest heavily in technology and marketing at this start-up stage.

The company, whose business model is one that relies on volume, also needs more money to finance expansion into other Southeast Asian countries next year.

"We are now doing (a) study on how much we need, for which market, and (how) to value the company accordingly," Zafrul said.

The company is currently 44.83 per cent owned by Tune Ventures Sdn Bhd, a company in which AirAsia Bhd's founder Datuk Tony Fernandes has a 40 per cent stake.

CIMB Structured Investments, a unit of CIMB Group, owns another 25 per cent of Tune Money. Other shareholders are Zafrul (10 per cent), Datuk Kalimullah Hassan and Lim Kian Onn (each holding 8.21 per cent), Tune Money Employees Sdn Bhd (2.25 per cent) and Kaneswaran Avili (1.5 per cent).