Khazanah Nasional, the state-owned investment fund, is pivoting its strategy to generate growth and stimulate local employment in Malaysia. This is manifest in its recent decision to transfer shares in Iskandar Malaysia Studios’ (IMS) operating company to the local management team, Studio Management Services (SMS).
Located in Iskandar Puteri, Johor, IMS currently occupies 19.8 hectares of land and is still owned by Khazanah via Tanjung Bidara Ventures, the fund’s special-purpose vehicle. This was confirmed by Deputy Finance Minister II Steven Sim Chee Keong, citing that the aim was to find a new partner that could manage the studio more effectively.
The impact of the Covid-19 pandemic has heightened financial sustainability challenges for the studio. Khazanah, according to Minister Sim, risked losing an estimated RM14 million annually if it continued to financially back IMS’s operations. The solution lay in selling operator shares.
Also read: Malaysian Home Ministry to Revise Decades-Old Gambling Laws amid Online Betting Surge
The chosen partner, SMS, has the objective of producing potential revenue of RM800 million within a five-year span. This will be achieved by drawing new productions to the studio, a move that is expected to have a positive influence on the local economy.
Through the transaction of IMS’s operator shares, Khazanah stands to gain RM32 million and an estimated total rental payment of RM26 million until 2036. The SMS consortium, which includes the current Malaysian team at IMS and Singapore-based entertainment company GHY Culture and Media, is leading this change.
The recent confirmation of Granatum Ventures, Khazanah Nasional’s special purpose vehicle, divesting its shares in IMS to SMS underscores this strategic shift. This sale is anticipated to spark further growth and development in IMS’s ecosystem.
With increased capacity for bigger productions, the studio could attract more foreign investment, leading to higher utilisation by regional and global players. Notably, the sale represents a 100% stake in IMS, which leases the land for its studio premises from Tanjung Bidara Ventures, another special-purpose vehicle of Khazanah.
Based on reporting from Marketing Interactive
