Foreign insurers look at RM8.58bil deals in Malaysia


  • Corporate News
  • Friday, 21 Jul 2017

Prudential has asked banks to pitch for a role advising on a domestic initial public offering (IPO) of its Malaysian unit, an option it is considering alongside a potential stake sale to an investor, according to the people.

KUALA LUMPUR: Overseas insurers including Prudential Plc are pursuing plans to sell stakes in their Malaysian units, in deals that could raise at least a combined US$2bil (RM8.58bil) and help them comply with foreign ownership limits, people with knowledge of the matter said.

Prudential has asked banks to pitch for a role advising on a domestic initial public offering (IPO) of its Malaysian unit, an option it is considering alongside a potential stake sale to an investor, according to the people.

Singapore’s Great Eastern Holdings Ltd is also exploring cutting its local holding to 70% through a sale or IPO, the people said, asking not to be identified because the details are private.

A sale of a 30% stake in Great Eastern Life Assurance (M) Bhd could raise about RM5bil, while the disposal of a similar stake in Prudential Malaysia Assurance Bhd would fetch at least RM3bil, the people said.

Japan’s Tokio Marine Holdings Inc has appointed a bank to advise on options for cutting its stake in its local unit, which could raise around RM1bil, according to one of the people.

Foreign insurers have until end of June 2018 to reduce their holdings in local firms to 70% at most, one person said.

Bank Negara had been weighing tougher enforcement of a cap on foreign ownership as it sought to boost local participation in the industry, people familiar with the matter said in April.

Representatives for Great Eastern and Prudential declined to comment, while a representative for Tokio Marine didn’t immediately answer e-mailed questions.

The central bank would continue to engage with the insurers on their plans, Bank Negara said in a statement, declining to comment further.

Any companies that opt to pursue IPOs would join Manulife Holdings Bhd and Allianz Malaysia Bhd, the only local insurers with majority foreign ownership that are traded on Bursa Malaysia.

The deals would help extend a rebound in Malaysian first-time share sales, which have raised US$1.7bil this year, up from US$255mil during the same period in 2016, according to data compiled by Bloomberg. — Bloomberg

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