Business

Friday October 2, 2009

Tabung Haji to take up RM216mil Bank Islam preference shares

By IZWAN IDRIS


PETALING JAYA: Bank Islam Malaysia Bhd says Lembaga Tabung Haji (LTH), which has direct and indirect stakes in the bank, has made the commitment to take up RM216mil worth of Islamic preference shares that was previously allocated to Dubai Financial Group LLC under its RM540mil cash-call exercise.

The offer to Dubai Financial, which owns a 40% stake in bank Islam, had lapsed on Sept 30.

BIMB Holdings Bhd is the single largest investor with a 51% share in the country’s second largest Islamic lender, while LTH has a direct 9% stake in the bank.

LTH also controls a 51.5% stake in BIMB.

In a statement posted on its website, the Dubai group said it was reviewing its stake in Bank Islam to focus on markets in the Middle East.

This has stoked fresh speculation that Dubai Financial, a company under the Dubai Group, is selling its stake in Bank Islam.

“Dubai Group confirms that it is in the process of reviewing its strategic options relating to its stake,’’ it said on the group’s website yesterday in response to Bank Islam’s earlier announcement.

“Following the reassessment of its investment strategy, Dubai Group has redirected its competitive advantage closer to home, namely the Gulf Cooperation Countries and greater Middle East regions,” according to the statement. “Malaysia does remain a key market for future investments.”

In response to media queries, Bank Islam issued a second statement late yesterday that said the possibility of Dubai Financial selling its stake was “strictly its prerogative” as a shareholder.

“However, if and when Dubai Financial Group sells its stake, Bank Islam would welcome any strategic partner that can add value to the bank’s business and growth plans,’’ it said.

Bank Islam had in April announced a plan to sell Islamic preference shares to raise RM540mil in Tier-1 capital. The cash call was made to its three shareholders – BIMB, LTH and Dubai Financial – on a pro rata basis.

BIMB and LTH had accepted their Islamic convertible redeemable non-cumulative preference shares entitlements of RM275.4mil and RM48.6mil respectively in July.

This had raised the bank’s Tier-1 capital to RM324mil.

LTH’s commitment to subscribe to the remaining portion means the bank would be able to raise the targeted amount.

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