KUALA LUMPUR: BIMB Holdings Bhd will undertake a group restructuring exercise and transfer its listing status to its subsidiary Bank Islam Malaysia Bhd (Bank Islam).
BIMB in a filing with Bursa Malaysia today said the restructuring would involve five components comprising a placement, a scheme of arrangement (SOA), an internal reorganisation, distribution and capital repayment and listing of Bank Islam.
The filing further noted that the placement of new BIMB shares to raise RM800 million.
The proceeds together with internal cash will be used to fully settle BHB’s outstanding sukuk, held by Lembaga Tabung Haji (LTH), it said.
BHB said the SOA will also settle outstanding warrants and would be paid in cash for the cancellation of exercise rights.
Further, an internal reorganisation will be proposed to dispose of its entire stake in its stockbroking and leasing subsidiaries to Bank Islam.
Once the first three restructuring exercises completed, its entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd (STMKB) will be distributed by way of distribution-in-specie to BIMB’s shareholders.
Prior to the distribution and capital repayment, BIMB will undergo a capital reduction and Bank Islam will undertake a share consolidation, the filing said.
The exercise is aimed to match BIMB’s outstanding shares, allowing the distribution of Bank Islam shares on a one-for-one basis.
Meanwhile, BIMB shareholders will hold a direct equity interest in Bank Islam and STMKB shares in proportion to their shareholding in BIMB.
BIMB’s listing status will then be transferred to Bank Islam. This will emerge as the one and only pure-play full-fledged Islamic financial institution to be listed in the region and enhance its corporate stature, the Bursa filing noted.
The listing allows Bank Islam to better position itself in the Islamic finance and Islamic capital market, while capitalising on the growth of both markets in its efforts to expand its customer base.
Further, the new group structure is expected to have potential earnings accretion through the elimination of, or minimisation of resources and infrastructure duplication as well as reducing the complexity of group risk management.
However, the exercise is subject to approvals and/or consent of several authorities including Bank Negara Malaysia, Ministry of Finance, the Securities Commission, Bursa Securities, as well as shareholders of BIMB and Bank Islam.