MAA may conclude unit sale to AMG by fourth quarter

KUALA LUMPUR: MAA Holdings Bhd expects to conclude the sale of its general insurance business and 4.9% stake in MAA Takaful Bhd to AMG Insurance Bhd by the fourth quarter, said chief executive officer Muhamad Umar Swift.
The general insurance business was priced at RM274.8mil and the MAA Takaful stake at RM16.2mil, Bernama quoted him as saying.
Both parties had agreed to the terms and the next step was to secure the approval of Bank Negara and shareholders, he said after the group AGM yesterday.
MAA Holdings chairman Tunku Datuk Ya’acob Tunku Abdullah said the group was also looking to raise its capital to further grow business and would opt for a rights issue or issuing new notes.
“MAA has not raised capital in the last 20 years. In the past, we funded via medium-term notes, for which we will start repayment next year for five years.
“We are still deliberating on the ideal structure to raise capital,” he said, adding that it was also looking at disposing its non-core businesses.
Muhamad Umar said once the transaction with AMG Insurance was completed, the group would have a clearer picture on the best course of action to raise fund. “We are trying to move away from debt and towards equity funding,” he said.
On the group’s plan to expand its overseas operations, Muhamad Umar said it was business as usual and MAA Holdings was open to any beneficial tie-ups.
“We have invested a lot in these operations and are looking for strategic partners that can take us to the next capital level to expand,” he said.
Meanwhile, MAA Holdings has posted a net profit of RM24mil, or 7.88 sen per share, in the first quarter ended March 31, mainly on higher operating income recorded by the group’s shareholders ’ fund.
“The profit in shareholders’ fund was due to mainly reversal of fair value loss of RM25.3mil arising from an interest rate swap transaction resulted from improvement in the market condition of the US municipal bond,’’ it said.
Revenue during the period under review was RM485mil versus RM519mil a year ago.

(THE STAR, Saturday May 30, 2009)