KUALA LUMPUR: BIMB Holdings Bhd (BHB) announced on Dec 11 that it will undertake a group restructuring exercise that will unlock significant value for shareholders and transfer its listing status to its subsidiary, Bank Islam Malaysia Bhd (Bank Islam).
In a Bursa Malaysia announcement, BHB said the proposed restructuring would involve five components:
i. A proposed placement (placement) of new BHB shares to raise RM800 mil to be used, together with internal cash, to fully settle BHB’s outstanding sukuk, held by Lembaga Tabung Haji (LTH).
ii. A scheme of arrangement (SOA) by BHB to settle its outstanding warrants, whereby BHB warrant holders would be paid cash for the cancellation of exercise rights in respect of the warrants.
iii. An internal reorganisation, whereby BHB will dispose its entire equity interests in its stockbroking and leasing subsidiaries to Bank Islam, to be settled in cash. The consideration for these disposals will be based on the latest audited net asset value of these subsidiaries.
iv. Distribution and capital repayment: After the completion of the placement, the SOA and the internal reorganisation, BHB’s entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd (STMKB) will be distributed by way of distribution-in-specie to the shareholders of BHB.
Before this, BHB will undergo a capital reduction and Bank Islam will undertake a share consolidation. This is to match BHB’s outstanding shares so that the distribution of Bank Islam shares will be on a one-for-one basis.
The basis of distribution and entitlement of STMKB shares will be determined later.
v. Listing of Bank Islam.
On completion of the distribution-in-specie, BHB shareholders will hold a direct equity interest in Bank Islam and STMKB shares in proportion to their shareholding in BHB.
BHB’s listing status will then be transferred to Bank Islam, which will emerge as the only pure-play full-fledged Islamic financial institution to be listed in the region and enhance its corporate stature.
In 1992, Bank Islam was listed on Bursa Malaysia before BHB was formed in 1997 to replace the bank as the holding company of the group, thus becoming the group’s listing vehicle.
This listing will allow Bank Islam to better position itself in Islamic finance and the Islamic capital market and capitalise on the growth of both markets in its efforts to expand its customer base.
BHB said following the distribution and capital repayment, it is expected that the new group structure will be able to achieve potential earnings accretion through the elimination or minimisation of resources and infrastructure duplication as well as reducing the complexity of group risk management.
Both Bank Islam and STMKB will be able to focus on their respective strengths, allowing for a more efficient utilisation of their balance sheets and capital management to grow.
The proposed exercise is subject to the approvals and/or consent of several authorities including Bank Negara Malaysia (BNM), Ministry of Finance (on the recommendation of BNM), the Securities Commission, Bursa Securities as well as shareholders of BHB and Bank Islam. – Bernama