Malaysia’s BIMB to start restructuring to move listing status to Bank Islam
Malaysia’s BIMB Holdings Bhd (BHB) has revealed details of its planned restructuring exercise that will move its listing status to current subsidiary Bank Islam.
In a filing with Bursa Malaysia on Wednesday (Dec 11), BIMB said the plan is for a placement of new BIMB shares of up to 800 million ringgit, a scheme of arrangement to settle outstanding warrants, an internal reorganisation, distribution and capital repayment, and transfer of listing to Bank Islam.
Proceeds from the proposed 800 million ringgit placement of new shares will go towards settling an outstanding sukuk issued to controlling shareholder Lembaga Tabung Haji.
The scheme of arrangement to pay warrant holders will be in a cash consideration for the cancellation of exercise rights in respect of the warrants, according to the statement. The total warrants consideration will be funded using internally-generated funds.
After the 800 million ringgit placement and scheme of arrangement are completed, the Group will undertake an internal reorganisation.
The Group said the internal reorganisation will “simplify the shareholding structure and the corporate structure of the BHB Group”.
“Fewer layers in the corporate structure will help enhance the supervision and efficiency of the new Bank Islam Group and facilitate the positioning of Bank Islam to become the frontrunner of the new banking group,” it said.
The internal reorganisation will involve disposal of the Group’s subsidiaries to Bank Islam.
“The total consideration for the Proposed Disposals will be paid in full by Bank Islam upon completion of the Proposed Internal Reorganisation in terms to be set out in the SSA (share sale agreement). The cash consideration will be funded using internally generated funds of Bank Islam,” said the Group.
Following this, the entire shareholdings of BHB in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd will be distributed by way of distribution-in-specie to the shareholders of BHB.
“Upon completion of the Proposed Distribution and Capital Repayment, the Distribution Entitled Shareholders will directly hold the Consolidated Bank Islam Shares and STMKB Shares, in proportion to their shareholdings in BHB as at the Distribution Entitlement Date and BHB will cease to be a shareholder of Bank Islam and STMKB,” said BHB.
There will then be a one-for-one share swap of BHB and Bank Islam shares after Bank Islam undertakes a share consolidation to match both outstanding share bases.
Bank Islam will then assume the listing status of BHB.
“The Proposed Transfer of Listing will also enable Bank Islam to gain direct access to the equity capital market for its fund raising activities to support its organic growth and provide an opportunity for investors to invest directly in Bank Islam via an investment in new Bank Islam Shares,” said the Group.
BIMB Holdings posted 7.24% increase in profit before tax for the third-quarter compared to the same three months last year.
The bank reported 317.8 million ringgit ($76.16 million) in profit before zakat and tax for July-September versus 296.35 million ringgit for the corresponding quarter in 2018.
However, Bank Islam, Malaysia’s oldest standalone Shariah-compliant bank, saw its profit before zakat and tax (PBZT) drop by 7.2% to 208.8 million ringgit compared to 225 million ringgit for the third-quarter of last year. The bank attributed the drop mainly to higher finance cost and net allowance for impairment on financing and advances.
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