MALAYSIAN Industrial Development Finance Bhd (MIDF) has received approval from Bank Negara to start negotiations with Utama Banking Group (UBG) to purchase the equity of Utama Merchant Bank Bhd (UMBB).
However, in a filing with the KLSE yesterday, MIDF said the approval was conditional on UBG obtaining the necessary clearance from the central bank to start negotiations with it.
The go-ahead to MIDF, granted on Oct 2, is only for the period up to Oct 30; and both MIDF and UBG are required to obtain the approval of the Finance Ministry before signing any agreement in respect of the proposed transaction.
Previously, Hong Leong Credit Bhd (HLC) was in negotiations with UBG to acquire UMBB. Both firms had in mid-2002 announced they were in negotiations. However, on Oct 3, HLC said the talks had been terminated. It provided no further details.
It is reported that MIDF, which provides a variety of financial services except merchant banking, aims to become an investment bank. And being only short of a merchant bank, the company has been looking for opportunities to acquire one.
To enlarge its presence in the financial services sector, MIDF had last year acquired Amanah Capital Partners Bhd (ACP), which offers discount house facilities, money broking and asset management. The group completed its voluntary offer to privatise ACP in March, and the latter was removed from the KLSE in April.
The privatisation plan was to fill the vacuum in MIDF created by the disposal of its stakes in Oriental Bank Bhd and Malaysian International Merchant Bankers Bhd.
Before the privatisation, MIDF was mainly involved as an issuing house, and in stockbroking and development finance.
It is now implementing an internal reorganisation scheme through six intra-group share sale agreements between its companies and those in ACP.
The scheme is to group the subsidiaries into four core businesses: capital markets and securities, asset management, development financing, and property-related services.
MIDF's net profit more than doubled to RM53.9mil for the financial year to March 31 from RM25.5mil. Turnover surged to RM301.7mil from RM154.4mil previously.
Amanah Capital Malaysia Bhd, Permodalan Nasional Bhd, Skim Amanah Saham Bumiputra and Malayan Banking Bhd are the four substantial shareholders of MIDF.
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