Affin Hwang sells stake in asset management unit

KUALA LUMPUR: Affin Hwang Investment Bank Bhd (Affin Hwang IB) and select key senior management in the company have entered into a conditional deal to divest 7.59 million shares, or 68.35% stake, in Affin Hwang Asset Management Bhd (Affin Hwang AM) to CVC Capital Partners.

In a filing with Bursa Malaysia, Affin Hwang IB, on behalf of parent company Affin Bank Bhd, said it had entered into a conditional share sale and purchase agreement with Starlight Asset Sdn Bhd, a company controlled by CVC Capital Partners, for the proposed divestment for a provisional cash consideration of RM1.54bil.

The transaction values Affin Hwang AM at RM2.25bil based on 100% equity interest.

Under the proposal, Affin Hwang IB would dispose of seven million shares or 63% stake in the Affin Hwang AM while the selected key senior management will sell 594,338 units or 5.35% stake.

“The group will recognise profit from divestment of RM1,037.2mil for the sale of its 63% stake in Affin Hwang AM to CVC.

“The disposal will allow the group to realise a premium based on the consideration, which represents a historical price-to-asset under management and price-earnings multiple of 3.1% and 19.7 times, respectively, based on Affin Hwang AM’s audited financial statements for the financial year ended Dec 31, 2020.

“The divestment is expected to enhance the group’s Common Equity Tier-1 ratio by 289 basis points, based on its audited financials for the financial year ended Dec 31, 2020,” it said.

The group said it will channel the gains towards working capital requirements to grow its core banking business.

The transaction is expected to be completed in the third quarter of 2022 and is subject to shareholder approval of Affin Bank and relevant regulatory approvals.

“Our enhanced capital ratios will put us in a strong position to implement our long-term business plan and catapult the group’s position for its A25 Plan to achieve total loans and financing of RM90bil by end-2025.

“As at Sept 30, 2021, our total loans and financing stood at RM49bil,” said Affin Bank president and group CEO Datuk Wan Razly Abdullah Wan Ali.

Upon completion of the proposed divestment, Affin Hwang AM will cease to be a subsidiary of Affin Hwang IB and the financial results of Affin Hwang AM will be deconsolidated from Affin Bank and its subsidiaries’ consolidated financial statements.

Affin group acquired a 70% stake in Affin Hwang AM in 2014 when it acquired Hwang-DBS. The business has grown from assets under management of RM30bil as at end-2014 to RM81bil as at end-2021.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Affin , Affin Hwang AM , CVC Capital


Next In Business News

Ringgit opens marginally higher as greenback demand eases
Singapore economy expands 3.7% in Q1 2022
Leong Hup faces near-term headwinds
Bursa bounces after sharp losses
Trading ideas: KLK, KLCCP Staple Group, TSH Resources, UWW Holdings, Farm Fresh, Boustead Heavy Industries, Menang, Perak, Sime Darby, Malakoff, Pekat Group and GDeX
Facing crisis, Sri Lanka to cut spending 'to the bone'
India could cut import tax on some edible oils to tame local prices
Africa objects, Malaysia has reservations, on US push to reform health rules at WHO
GLOBAL MARKETS-Stocks tumble on growth concerns, bond yields slip
Oil steadies after choppy trade, US says export ban not ruled out

Others Also Read