Hong Leong Bank and parent plan rights issue of up to RM4.1b

PETALING JAYA: Hong Leong Bank Bhd (HLB) and its parent, Hong Leong Financial Group Bhd (HLFG) will raise up to RM4.1 billion through rights issues, by the fourth quarter of this year.
In separate announcements made to Bursa Malaysia yesterday, Hong Leong Bank said it is looking to raise up to RM3 billion for working capital through a rights issue, while HLFG said it is looking to raise RM1.1 billion through a renounceable rights issue, to subscribe to HLB's issuance.
Its holding company, HLFG and its wholly owned unit, Hong Leong Equities Sdn Bhd, have undertaken to subscribe in full their respective entitlements of HLB's rights issue.
Based on the aggregate direct shareholdings of HLFG and HLE of about 64.23% in HLB, the capital outlay required to fully subscribe for their entitlements is about RM1.9 billion.
HLB will set aside RM2.993 billion from the proceeds for its working capital and the balance to defray expenses of the rights issue exercise.
"The proposed rights issue is undertaken as part of HLB's capital management strategy to further strengthen its capital position to support the continued business growth of the group.
"The proposed rights issue will also facilitate the build-up of an adequate level of capital buffer in preparation for the forthcoming regulatory capital requirements," HLB said.