The group intends to place out portions of new shares to fully settle its outstanding sukuk held by TH among others

By SHAHEERA AZNAM SHAH / Pic By BLOOMBERG

BIMB Holdings Bhd is embarking on a restructuring exercise which will enable the transfer of its listing status to its banking arm, Bank Islam Malaysia Bhd.

In a statement yesterday, the group said it intends to place out portions of new shares to raise up to RM800 million, which would be utilised to fully settle BIMB’s outstanding sukuk held by Lembaga Tabung Haji (TH).

The group will also settle its outstanding warrants through a scheme of arrangement (SOA) involving payment of cash consideration via internally generated funds to the warrant holders for the cancellation of exercise rights in relation to the warrants.

Following the completion of the proposed placement and the SOA, the group will embark on an internal reorganisation, which will see BIMB disposing of its entire equity interests in its stockbroking and leasing subsidiaries to Bank Islam, to be settled in cash.

“The consideration for these disposals will be based on the latest audited net asset value of these subsidiaries,” BIMB said.

The group will dispose of its stakes in BIMB Securities Sdn Bhd and Syarikat Al-Ijarah Sdn Bhd to Bank Islam.

Proceeds from the disposal will be used to settle the group’s outstanding liabilities and defray estimated asset transfer-related expenses.

Following completion of the placement, SOA and internal reshuffle, BIMB’s entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd (STMKB) will be distributed via distribution-in-specie to its shareholders.

Prior to the proposed distribution and capital repayment, the group will undergo a capital reduction, while Bank Islam will undertake a share consolidation.

This is to match BIMB’s outstanding shares to ensure the distribution of Bank Islam shares will be on a one-for-one basis.

“On completion of the distribution-in-specie, BIMB’s shareholders will hold a direct equity interest in Bank Islam and STMKB shares in proportion to their shareholding in BIMB.

“BIMB’s listing status will then be transferred to Bank Islam, which will emerge as the one and only pure-play full-fledged Islamic financial institution to be listed in the region,” it said.

Upon the distribution and capital repayment, the new group structure is expected to achieve potential earnings accretion by eliminating or minimising resources and infrastructure duplication, as well as reducing risk management complexity.

Both Bank Islam and STMKB will be able to focus on their respective strengths, allowing for more efficient utilisation of balance sheets and capital management to grow.

The proposals are forecast to be completed in the third quarter of 2020.

Shares of BIMB closed 0.47% lower at RM4.28 yesterday, valuing the group at RM7.55 billion.