MPHB Capital to sell 49% stake in MPIB

PETALING JAYA: MPHB Capital Bhd is selling its 49% stake in Multi-Purpose Insurans Bhd (MPIB) to Generali Asia N.V. for RM355.8 million cash, marking the entry of the Italian group's unit into the Malaysian non-life insurance market.
The deal also entails a call and put option, which is tied to the stake sale.
MPHB Capital's Multi-Purpose Capital Holdings Bhd (MPCHB) has agreed to a call option which will see it sell up to 21% to Generali Asia within two years of the completion of the deal.
The put option by Generali Asia can be exercised after five years of the completion of the deal should the call option not be approved by Bank Negara Malaysia (BNM) or in the event of approval of the option is only for a number of shares which result in Generali Asia holding a minority shareholding in MPIB, post exercise.
MPCHB said the deal is to develop a portfolio of international clientele and to comply with BNM's ruling for it to limit its shareholding in MPIB to 10%.
As part of the proposed disposal, if the net assets of MPIB as at completion accounts date exceeds the audited net assets as at Dec 31, 2013, Generali Asia will pay 49% of the increase in net assets to MPCHB and vice versa.
The proposed disposal will result in a proforma gain of RM208.6 million based on the audited consolidated financial statements of MPHB Capital as at Dec 31, 2013.
The transactions are expected to be completed by early 2015 and MPIB will change its name to MPI Generali Insurans Bhd within 12 months from completion, subject to applicable laws.
Maybank Investment Bank Bhd and Newfields Advisors Sdn Bhd have been appointed by MPHB Capital as the principal adviser and the financial adviser respectively for the transaction.