AMMB GETS BANK NEGARA APPROVAL TO START TALKS WITH FRIENDS LIFE ON REPURCHASE
Source: The Star, 17 October 2012
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.