PETALING JAYA: BIMB Holdings Bhd is proposing to a group restructuring exercise that will see the transfer of its listing status to subsidiary, Bank Islam Malaysia Bhd.

In a statement, BIMB said the proposed restructuring would involve five components. These are: a proposed placement of new BIMB shares to raise RM800 million, a scheme of arrangement (SOA) by BIMB to settle its outstanding warrants, an internal reorganisation, distribution and capital repayment and the listing of Bank Islam.

The RM800 million raised from the placement, together with internal cash will be used to fully settle BIMB’s outstanding sukuk, held by Lembaga Tabung Haji.

The internal reorganisation will see BIMB disposing its entire equity interests in its stockbroking and leasing subsidiaries to Bank Islam, to be settled in cash.

After the completion of the placement, the SOA and the internal reorganisation, BIMB’s entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd will be distributed by way of distribution-in-specie to BIMB shareholders.

Prior to the proposed distribution and capital repayment, BIMB will undergo a capital reduction and Bank Islam will undertake a share consolidation. This is to match BHB’s outstanding shares so that the distribution of Bank Islam shares will be on a one-for-one basis.

“On completion of the distribution-in-specie, BIMB shareholders will hold a direct equity interest in Bank Islam and Syarikat Takaful shares in proportion to their shareholding in BIMB.

“Following the distribution and capital repayment, it is expected that the new group structure will be able to achieve potential earnings accretion through the elimination of, or minimisation of resources and infrastructure duplication as well as reducing the complexity of group risk management,” it said.

BIMB’s listing status will then be transferred to Bank Islam, which will emerge as the one and only pure-play full-fledged Islamic financial institution to be listed in the region.

The statement noted that both Bank Islam and Syarikat Takaful will be able to focus on their respective strengths, allowing for a more efficient utilisation of their balance sheets and capital management to grow.

The proposed exercise is subject to approvals and/or consent of several authorities including Bank Negara Malaysia (BNM), Ministry of Finance (on the recommendation of BNM), the Securities Commission, Bursa Securities, as well as shareholders of BIMB and Bank Islam.

Barring unforeseen circumstances, the proposals are expected to be completed in the third quarter of 2020.

BIMB’s share price ended down 2 sen to RM4.28 today.