Malaysia Business News From Newspapers, Blogs, Broker House.

Thursday, August 21, 2014

Coffee Chat - RHBCap/CIMB/OSK/MBSB, Malton, RHBCa


RHBCAP/MBSB/CIMB: RHB Cap could become the holding company if plans to merge it with CIMB and MBSB materializes.
 
Sources said one of the routes being considered currently (Aug 2014) is for CIMB to sell its entire banking business to RHBCap to be paid by an issuance of new RHB Cap shares.

Once RHBCap takes over CIMB Group’s banking assets, the commercial and investment banking businesses of both groups will be consolidated.

As part of the step by step merger, RHB Islamic will subsequently sell its entire business, in  exchange for shares, to CIMB Islamic Bhd which will end up being the vehicle for the merged Islamic banking businesses.

The last step will see the EPF, which owns 64.6% stake of MBSB, making an offer to take out the minority shareholders and once that is done, MBSB’s businesses will be injected into the enlarged Islamic bank.

Sources said this route to merger is preferred over an outright purchase of RHBCAP of its assets as this will likely be blocked by Aabar Investments, which had made clear its objection to any sale unless it is a price it is happy with.

In order for RHBCap to push through a sale of assets, it will need support from 75% of its shareholders, Aabar owns 21.2% of RHBCap.

On the other hand, RHBCap will need only 50% plus one share from its shareholders to buy CIMB Group’s business.

If the merger takes place as proposed, the EPF will end up as the single’s largest shareholder in the merged entity with a 22.3% stake followed by Khazanah Nasional with 20.8% stake.

The other substantial shareholders will be Aabar with 6.1% stake, Mitsubishi UFJ with 3.3% stake and OSK Holdings with 2.8% stake.

Malton: It is undertaking a private exercise to raise funds for upcoming projects. It is expected to raise some rm40 million or a placement price of rm1.10.

Institutions like Malton but the share price is volatile and they cannot get enough shares.

Observers had ascribe a fair value of around rm1.70 give its strategic landbank. Its latest reported NAV stood at rm1.55 a share.

Its net cash in operating activities stood at rm32.3 million as at March 31 2014 versus rm193 million a year ago while its total borrowings stood at rm397 million.

It is posed to play a bigger role in the development of Damansara Tow Centre, expected to be completed over seven or eight years from 2014.

It also has three projects in the pipeline worth rm7.9 billion at Bukit Jalil, Batu Kawan in Penang and Pengerang in Johor. Malton will be building a shopping mall worth rm3.5 billion in Bukit Jalil.

RHBCap: Sources say the merger between CIMB, RHBCap and MBSB could see RHBCap’s Investment banking unit up for sale.

Speculation is rife whether the buyer could be a local bank. The interested buyer are likely Public Bank and Affin Bank.


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