The WSJ said both Prudential and Tokio Marine planned to sell close to a third of the shares in their Malaysian units. These deals could potentially raise US$3bil collectively over the next nine months.
KUALA LUMPUR: Singapore-based Great Eastern Holdings Ltd (GEH) confirms it is assessing possible options over the sale of a minority stake in the Malaysian operations to comply with the foreign ownership rules.
In a statement issued on Thursday, it said the assessment was preliminary at this stage and shareholders were told that “there is no certainty that any agreement will be entered into”.
GEH, the insurance arm of OCBC, was responding to reports in the Singapore Straits Times and Business Times on Wednesday in relation to its stakes in the Malaysian operations.
The Straits Times, quoting a report in the Wall Street Journal, said GEH had engaged at least one Malaysian bank to explore selling a large stake in its Malaysian operations for as much as US$1bil (S$1.35bil).
GEH is among a number of insurers, including British life insurer Prudential and Japan's Tokio Marine Holdings, mulling a 30-per cent stake sale in their respective Malaysian subsidiaries.
The Straits Times said the disposal is to meet a Bank Negara Malaysia's June 2018 deadline to comply with the 70% foreign ownership cap on insurers, which was issued back in 2009. The foreign insurance firms had been enjoying exemptions from the rule, but in July this year the Malaysian central bank said they must honour their commitment to meet it.
In the latest development, GEH told shareholders to refrain from taking any action in respects of their shares which may be prejudicial to the interest and to exercise caution when dealing in the shares.
“In the event that shareholders wish to deal in the shares of GEH, they should seek their own professional advice and consult with their own stockbrokers.
GEH said it would make the relevant disclosures, if any, at the appropriate time.
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