MUFG Innovation Partners (MUIP) joint with other investors, invested in Malaysian-based Carsome Sdn Bhd., with worth of US$50 million - Photo by the Company

JAKARTA (TheInsiderStories) MUFG Innovation Partners (MUIP) joint with other investors, invested in Malaysian-based Carsome Sdn Bhd., with worth of US$50 million to fend off its rivals and grow its business in Southeast Asian markets, said the venture capital company today (12/11). Carsome offers an online car-selling platform that connects clients to used car dealers nationwide.

In the financing series, the wholly-owned subsidiary of Japan’ Mitsubishi UFJ Financial Group joint with other Japanese firm, Daiwa PI Partners, the private equity arm of Daiwa Securities, Endeavor Catalyst, and Ondine Capital. Existing investors like Gobi Partners and Convergence Ventures also participated in the round, which pushes four-year-old startups’ total raise to date to $85 million.

Through the investment, MUIP supports Carsome’ business growth and expansion and seeks the strategic alliance among the MUFG Partner banks including PT Bank Danamon Tbk (IDX: BDMN) in Indonesia and Krunsgri in Thailand through Carsome’s internet auction platform.

In Indonesia, Carsome already partnered with, one of the brand under PT Adira Finance, the automotive financing arm of Bank Danamon. In addition to the on-going projects, MUFG Group will explore and plan to build robust relationship with the Company.

Carsome operates one of the largest car trading platforms in Southeast Asia, connecting individuals who wish to sell cars with dealers. The startup is today operational in Malaysia, Indonesia, and Thailand and claims its platform sees more than 40,000 cars worth more than $300 million trade on the platform.

Recently, Indonesia’ Financial Service Agency (FSA) has granted approval for MUFG Bank Ltd., to increase its investment in Bank Danamon.

The bank stated to increase its investment in the local bank to 40.0 percent by acquiring (directly or indirectly) an additional 20.1 percent from Asia Financial (Indonesia) Pte. Ltd. (AFI) and other affiliated entities, as part of second Step of the proposed transaction outlined in its announcement on Dec. 26, 2017.

MUFG Bank plans to complete the acquisition of the additional 20.1 percent of the publicly listed bank’ shares as soon as practicable, subject to other closing conditions customary for a transaction of this nature.

Upon the completion of this acquisition, MUFG Bank will become a controlling shareholder with 40.0 percent, AFI with 33.8 percent and public 26.2 percent in shareholding interests in Bank Danamon.

Last year, Mitsubishi UFJ Financial Group, Inc.’s MUFG Bankhas entered into conditional share purchase agreements with AFI and other affiliated entities to acquire their shares in BDMN. AFI is a wholly-owned subsidiary of Singapore-based Fullerton Financial Holdings Pte. Ltd.

Before the announcement, the sellers hold in aggregate 73.8 percent share of the local bank. The strategic investment by MUFG Bank will be executed through three steps, and completion of the proposed transaction will result the Japanese bank becoming the largest shareholder in Bank Danamon.

It will also bolster MUFG Bank’s growth strategy in Asia and Oceania also contribute to the overall development of the Indonesian banking sector.

In the first step, MUFG will acquire an initial 19.9 percent stake in BDMN, based on a price of Rp8,323 per share (US$0.58) or in total Rp15.88 trillion. The price was based on a 3Q17 P/B of 2.0x with certain adjustments applied.

For second step, MUFG intends to then seek regulatory and other relevant approvals to acquire an additional 20.1 percent to increase its stake in BDMN to 40 percent. This step is expected to close between second quarter to third quarter of 2018, subject to receiving these approvals.

Last step upon completion of second step, MUFG Bank intends to seek the necessary approvals to increase their stake in Bank Danamon beyond the 40 percent. With the closing of all steps, MUFG Bank’s final stake in the bank is expected to be over 73.8 percent.

In Indonesia, MUFG Bank has been operating for 50 years and currently has a full services two branches in Jakarta and Surabaya, and nine service points across the country.

Indonesia is the largest economy in Southeast Asia underpinned by excellent growth fundamentals including favorable demographics, a rich resource base and stable political climate.

As Japan and Indonesia celebrate 60 years of diplomatic relations in 2018, this partnership is also a fitting and timely reminder of the deep ties that exist between both countries. “And we will leverage this alliance to further intermediate business flows between these two great nations and contribute to ASEAN’s economy,” he said.

Currently, MUFG Bank has invested in a 77 percent stake in Bank of Ayudhya Public Company Limited (Krungsri) in Thailand, 20 percent in VietinBank in Vietnam and 20 percent in Security Bank Corporation in the Philippines.

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