PETALING JAYA: MNRB Holdings Bhd
has agreed to divest its two takaful subsidiaries to a unit of Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) for RM1.64bil in cash, marking a strategic move to sharpen its focus on its core reinsurance and retakaful operations.
The insurer said it had entered into an implementation agreement (IA) yesterday with Rakyat Nominees Sdn Bhd, the proposed purchaser, and Bank Rakyat, which has agreed to assume the obligations of its wholly owned subsidiary under the agreement.
The proposed sale involves MNRB's entire equity interests in Takaful Ikhlas Family Bhd and Takaful Ikhlas General Bhd, both of which are wholly owned subsidiaries. The purchase price is subject to customary adjustments and will be settled entirely in cash.
The IA sets out the framework for the parties to pursue the necessary regulatory approvals from Bank Negara and other relevant authorities before entering into definitive share sale and purchase agreements.
Among the approvals required are consent from the central bank and, where applicable, the Finance Minister for the transfer of the shares under the Islamic Financial Services Act 2013.
Approval is also required for Rakyat Nominees to become the financial holding company of the two takaful operators and for Bank Rakyat, through the nominee company, to establish them as subsidiaries under the Development Financial Institutions Act 2002.
In addition, the acquisition requires approval from the Entrepreneur and Cooperatives Development Minister, with the concurrence of the Finance Ministry.
The definitive share sale agreements must be executed within 12 months from the date of the IA, unless the parties mutually agree to extend the timeframe.
Besides the regulatory clearances, the proposed divestment is also subject to approval by MNRB shareholders at an extraordinary general meeting, as well as any other approvals that may be required.
Upon completion of the transaction, Takaful Ikhlas Family and Takaful Ikhlas General will cease to be subsidiaries of MNRB.
The company said the disposal forms part of its strategy to unlock the value of its investments in the direct takaful business while enabling the group to strengthen its focus on its core reinsurance and retakaful segments.
MNRB said the proposed divestment reflected a disciplined approach to strategic portfolio management and sustainable value creation. It added that concentrating on its core businesses would better position the group to pursue long-term growth opportunities while remaining aligned with the continued development of Malaysia's Islamic financial services industry.
The company said it would make further announcements as and when there are material developments relating to the proposed divestment.
