PRUNING STAKES
Deals may raise at least a combined RM8.58 billion, say sources
FOREIGN insurers are pursuing plans to sell stakes in their Malaysian units, in deals worth at least RM8.58 billion, to comply with the country’s foreign ownership limits, say sources.
KUALA LUMPUR
OVERSEAS insurers, including Prudential Plc, are pursuing plans to sell stakes in their Malaysian units, in deals that could raise at least a combined US$2 billion (RM8.58 billion) and help them comply with foreign ownership limits, said people with knowledge of the matter.
Prudential has asked banks to pitch for a role advising on a domestic initial public offering (IPO) of its Malaysian unit, an option it is considering alongside a potential stake sale to an investor, according to the people.
Singapore’s Great Eastern Holdings Ltd was also exploring cutting its local holding to 70 per cent through a sale or IPO, said the people.
A sale of a 30 per cent stake in Great Eastern Life Assurance (Malaysia) Bhd could raise about RM5 billion, while the disposal of a similar stake in Prudential Malaysia Assurance Bhd would fetch at least RM3 billion, said the people.
Japan’s Tokio Marine Holdings Inc has appointed a bank to advise on options for cutting its stake in its local unit, which could raise around RM1 billion, according to one of the people.
Foreign insurers have until end of June next year to reduce their holdings in local firms to 70 percent at most, said one person.
Bank Negara Malaysia has been weighing tougher enforcement of a cap on foreign ownership as it seeks to boost local participation in the industry, said people familiar with the matter in April.
Representatives for Great Eastern and Prudential declined to comment, while a representative for Tokio Marine didn’t answer emailed questions.
The central bank will continue to engage with the insurers on their plans, it said in a statement, declining to comment further.
Any companies that opt to pursue IPOs would join Manulife Holdings Bhd and Allianz Malaysia Bhd, the only local insurers with majority foreign ownership that are traded on Bursa Malaysia.
The deals would help extend a rebound in Malaysian first-time share sales, which have raised US$1.7 billion this year, up from US$255 million during the same period last year. Bloomberg