Business

Wednesday June 29, 2011

MAA in no hurry to sell overseas units


KUALA LUMPUR: MAA Holdings Bhd says it is not urgently seeking to sell its overseas units now that its debt obligations of RM140mil which are due for repayment soon, can be paid off following the sale of its insurance business for RM344mil cash.

Instead, the group was now looking to “build up” its insurance businesses in Indonesia and the Philippines, chief executive officer and group managing director Muhamad Umar Swift said after the company’s shareholders’ meeting here yesterday.

“Our business in the Philippines is doing well. Indonesia has been slower than expected. We are looking at partnerships that can leverage that particular asset,” he said without elaborating.

Earlier, it was reported that MAA was looking to dispose of its foreign operations in Indonesia and the Phillipines partly to pay for its bonds due soon.

Meanwhile, executive chairman Tunku Datuk Ya’acob Tunku Abdullah said MAA, which was now left with the takaful and unit trust businesses in Malaysia, having hived off its insurance business, would continue to grow its existing businesses.

MAA aimed to make its takaful business a RM1bil business in five years time, he said.

Earlier this month, MAA announced a proposed sale of its Malaysian insurance business for RM344mil cash to Zurich Insurance Co Ltd.

The cash price of RM344mil translates into 1.36 times book value and is reported to be cheap, according to industry players.

Previous insurance disposals ranged from close to 1.6 times for Pacific Insurance Bhd to 2.24 times for Jerneh Insurance Bhd, while Hong Leong Assurance Bhd was sold for 6.5 times.

The rationale for the sale of MAA’s insurance business was to meet the requirements of minimum supervisory capital-adequacy ratio (CAR) of 130% under the risk-based capital or RBC framework.

The EGM for shareholders to approve the deal is likely to be held by the end of next month.

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