AMMB GETS BANK NE­GARA AP­PROVAL TO START TALKS WITH FRIENDS LIFE ON RE­PUR­CHASE

Source: The Star, 17 Oc­to­ber 2012

Insurance - - COMPANY CORNER -

Bank Ne­gara Malaysia has given ap­proval to AMMB Hold­ings Bhd to com­mence ne­go­ti­a­tions with Friends Life FPL Ltd, UK-based pen­sion, life and in­vest­ment firm for the re­pur­chase of 30% eq­uity in­ter­est held by Friends Life in two joint ven­tures AmLife In­surance Bhd (AmLife) and AmFam­ily Taka­ful Bhd (AmTaka­ful).

AMMB, AmLife and AmTaka­ful chair­man Tan Sri Az­man Hashim said the pro­posed re­pur­chase al­lowed both AMMB and Friends Life to pur­sue sep­a­rate strate­gies to en­hance the re­spec­tive busi­nesses. While AMMB group man­ag­ing di­rec­tor Ashok Ra­ma­murthy said it would en­able the group to fo­cus on op­por­tu­ni­ties unique to the group's busi­ness model.

Friends Life joint ven­ture part­ner­ship with AMMB be­gan in De­cem­ber 2008 with the ac­qui­si­tion of a 30% share­hold­ing in AmLife for RM170 mil­lion and an­other ac­qui­si­tion of a 30% eq­uity in­ter­est in AmFam­ily Taka­ful in De­cem­ber 2011.

In the later col­lab­o­ra­tion, Friends Life contributed RM30 mil­lion for AmTaka­ful's ini­tial paid-up cap­i­tal of RM100 mil­lion, af­ter sign­ing a share­hold­ers' agree­ment with AMMB's whose bank­ing sub­sidiary contributed the re­main­ing RM70 mil­lion.

It was re­ported by Reuters that the sale of Friends Life's stake in AmLife formed part of a pre­vi­ously-an­nounced ef­fort by Res­o­lu­tion Ltd, Friends Life's ul­ti­mate par­ent com­pany, to stream­line its op­er­a­tions and in­crease cash gen­er­a­tion. It also re­ported that Res­o­lu­tion called a halt to takeovers ear­lier this year as it would like to fo­cus in­stead on squeez­ing sav­ings out of its ex­ist­ing as­sets, which in­clude life in­surer Friends Life.

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