Great Eastern weighs options on stake
Move is in relation to Bank Negara’s plan to raise local participation in insurance industry
PETALING JAYA: Singapore-based insurer Great Eastern Holdings Ltd (GEH) has announced that it is assessing possible options relating to a minority stake in Great Eastern Life Assurance (M) Bhd (GELA) to comply with foreign ownership requirements.
In a filing with the Singapore Exchange, GEH said the assessment of possible options was currently at the preliminary stage.
“Shareholders of GEH are advised that there is no certainty that any agreement would be entered into.
“Shareholders are also advised to refrain from taking any action in respect of their shares in GEH which may be prejudicial to their interests, and to exercise caution when dealing in GEH shares,” it said.
GEH, which is an 87% subsidiary of OCBC Bank in Singapore, made the announcement following Wednesday reports in the Singapore Straits Times and Business Times in relation to GEH’s stake in its Malaysian operations.
An earlier report by The Wall Street Journal (WSJ) highlighted that GEH had already engaged a Malaysian bank to discuss the potential deal. Should the deal materialise, then the sale of a large stake in GELA could amount to as much as US$1bil (S$1.35bil).
The WSJ added that both the United Kingdom’s Prudential plc and Japan’s Tokio Marine Holdings have plans to sell close to one third of their shares in their respective Malaysian subsidiaries.
Bank Negara has set out a June 2018 deadline for insurers to meet the central bank’s requirements of a 30% local ownership to increase local participation in the insurance industry.
According to the Straits Times, the stake disposal to meet Bank Negara’s requirement was first issued in 2009 but in July this year, Bank Negara called for foreign insurance firms to honour their commitment to meet the requirement.
GEH, in the Singapore Exchange announcement, said GEH shareholders who wished to deal in the shares of GEH should seek their own professional advice and consult with their own stockbrokers.
The company will make relevant disclosures, if any, at the appropriate time, in compliance with the applicable rules.