Financially distressed Tricubes gets 'lifeline'

  • Business
  • Wednesday, 27 Apr 2011

KUALA LUMPUR: Tricubes Bhd, which admitted that the RM50mil 1Malaysia e-mail project was a “lifeline” for the financially distressed company, had secured a RM5.3mil financing facility from a venture capital outfit and would have a rights issue to fund the project.

“We have secured an initial investment of RM5.3mil from Mavcap (the Malaysia Venture Capital Management Bhd) and the balance will be funded through equity, debt or a rights issue,” Tricubes chief executive officer Khairun Zainal Mokhtar told a media briefing yesterday.

The briefing was held to “correct” perceptions surrounding the Guidance Note 3 (GN3) company (as its shareholders' fund was 50% lower than its paid-up capital) and its appointment to undertake this entry point project under the Economic Transformation Programme.

Khairun said the company had a two-pronged business model - it would depend on the volume of push e-mails sent out on behalf of clients as well as the usage of value-added services made available on its portal.

He added the myemail service would see users receiving bill presentment and notifications while the portal would offer other value-added services including social networking, online bill payments, and job boards. The delivery cost of digital bills will not be more than 50 sen, with the cost borne by senders.

While users will not have to pay for basic e-mail facilities, they will be charged a cost for optional e-mail services requiring encryption facilities for secure documentation.

To sign up for the e-mail, users will have to do so at the National Registration Department or they can opt to do it themselves by purchasing a USB-biometric device. The price for the device was not disclosed.

Agencies are said to save at least RM200mil in the next 10 years, as the digital process eliminates document generation, sorting and enveloping and distribution.

“We did a sample of four organisations to see how much they would save from simplifying the bill presentment process,” said Khairun.

To be launched in July, the company aims to sign up 5.4 million users by year-end and is currently in talks with several government agencies to utilise its services.

The 1Malaysia e-mail project aims to centralised e-government services such as online notifications and digital bill statements from government agencies.

Khairun said that the company operates in a free market and brushed aside allegations that Tricubes would have a monopoly over the 1Malaysia email project.

“It is not a monopoly - myemail was a RFP (request for proposal) and a selection process was done, in which we were selected,” he said, adding that four other companies had submitted their proposals.

He added that the company's GN3 status did not prevent it from doing business, that its debt and financial obligations were up-to-date and that its shareholders' fund was positive.

“There are a few misconceptions about our company as we are not almost defunct - GN3 only affects the listing status but not our ability to execute projects,” he said.

Khairun acknowledge that the 1Malaysia email project would provide a “lifeline” to the company. Tricubes is required to submit its regularisation plan to regulator Bursa Malaysia Securities Bhd by October this year.

Tricubes appointed M&A Securities Sdn Bhd in January as a regularisation sponsor and expectedto raise additional funds from the rights issue as part of its financial regularisation plan.

“We are in the midst of discussions with financial institutions about the rights issue,” said Khairun.

Khairun reiterated that the project was a privately funded initiative, and that the Government had not provided any guarantees nor are government agencies compelled to use the services. However, the project's key performance indicators (KPIs) were set by the government as a yardstick to measure the project's success.

He added that the KPI of securing 100% of Malaysian aged 18 and above was a “stretch target”.

When asked what would be the difference in its product offering compared with the MyEG portal, which serves as an electronic link between the Government and Malaysians currently, Khairun said: “MyEG focuses on online payments, renewing of drivers licences and paying of summons. We are like a post office - we deliver the notices and are not focusing now on payments.”

StarBiz reported yesterday that Pos Malaysia Bhd would see its mail volumes drop further as Tricubes' proposal threatens to eat into the former's government-related mail portfolio, which includes statements from the Employees Provident Fund and Inland Revenue Board.

Related Stories: Asian markets up, ringgit to USD at 2.9780 E-mail job a boon to Tricubes prospects CIMB chief: Investment in Tricubes on behalf of client Tricubes shares soar on news it will be working with Microsoft Tricubes to bank on govt project Tricubes awarded 1Malaysia project

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