CIMB Group to buy stake in Jupiter Securities

By NUR HAZIQAH A MALEK & MARK RAO / Pic By TMR filepic

CIMB Group Holdings Bhd has reached an agreement to acquire a 76.55% stake in Jupiter Securities Sdn Bhd for RM55 million via its wholly owned unit CIMB Group Sdn Bhd, as part of its proposed joint venture with China Galaxy International Financial Holdings Ltd.

In an exchange filing yesterday, the international bank said brokerage firm Jupiter Securities — a subsidiary under Olympia Industries Bhd — will act as the Malaysian platform for the partnership, which is geared towards repositioning its stockbroking business as a pure play broker within the Asean market.

The second-largest lender in Malaysia has been eyeing Jupiter Securities since March this year, as it seeks to secure an additional licence for its stockbroking business to expand its reach and reduce costs.

If successful, the share purchase agreement will see CIMB Group acquiring Olympia’s entire stake in the broker, which consists of 80.29 million ordinary shares after the full conversion of two million redeemable convertible preferences held by Olympia.

In a separate filing on the same day, Olympia said the sale allows the group to realise its investment in Jupiter Securities, while further reducing its borrowings.

The company said the majority of proceeds (RM26.3 million) from the proposed divestment will be utilised for working capital, while
RM15 million is to pare down borrowings.

Its net assets per share will also improve from 38 sen to 40 sen, while gearing is to be lowered from 44.3% to 37.9%.