Type	Announcement
Subject	MALAYAN BANKING BERHAD (COMPANY NO. 3813-K) - PROPOSED ACQUISITION OF 77.24% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF UMBC INSURANS BERHAD (COMPANY NO. 4157-A) BY MAYBAN ASSURANCE BERHAD (COMPANY NO.33361-W)

Contents :

Aseambankers Malaysia Berhad ("Aseambankers") (Company no. 15938-H), on behalf of the Board of Directors of Malayan Banking Berhad ("Maybank"), is pleased to announce that Mayban Assurance Berhad ("MAB"), a 90% owned subsidiary of Maybank, has entered into a conditional sale and purchase agreement with Sime Bank Berhad ("Sime Bank") (Company no. 3407-T) for the acquisition of 77.24% of the issued and paid-up share capital of UMBC Insurans Berhad ("UMBCI") from Sime Bank ("Conditional S&P") on 17 May 1999.

The signing of the Conditional S&P between MAB and Sime Bank is made pursuant to the memorandum of understanding signed between the two parties on 15 December 1998.

The necessary approval under the Insurance Act, 1996 ("the Act") was obtained from Bank Negara Malaysia ("BNM") on 14 May 1999 for MAB to enter into the Conditional S&P with Sime Bank for the proposed acquisition of 77.24% of the issued and paid-up share capital of UMBCI ("Proposed Acquisition").

2. DETAILS OF THE PROPOSED ACQUISITION

The Conditional S&P sets out the details of the Proposed Acquisition of 77.24% of the issued and paid-up share capital of UMBCI from Sime Bank of RM37,075,681 comprising of 37,075,681 ordinary shares of RM1.00 each for cash.

The shares in UMBCI will be acquired free from all claims, charges, liens, encumbrances and adverse interests together with all rights attached to them and with all dividends and distributions declared or made with respect thereof as from the completion date of the Proposed Acquisition.

The Proposed Acquisition is conditional upon the following:-

(a) approval of the Foreign Investment Committee;

(b) approval of the Securities Commission, if any;

(c) MAB obtaining at least 90% of the equity interest in UMBCI; and

(d) approval of the Monetary Authority of Singapore, if any.


3. INFORMATION ON UMBCI

UMBCI was incorporated in Malaysia on 5 July 1961. The company currently has an authorised share capital of RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each of which 48,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up.

UMBCI is a 77.24% subsidiary of Sime Bank and is licensed under the Act to carry on the business of general insurance.

4. PURCHASE CONSIDERATION

The purchase consideration for the Proposed Acquisition was arrived at on a willing buyer, willing seller basis having regard to the Adjusted Net Tangible Assets of UMBCI, to be adjusted up to completion date.

5. RATIONALE FOR THE PROPOSED ACQUISITION OF UMBCI

The Proposed Acquisition of UMBCI will significantly improve MAB's market position in terms of gross premium income and total assets. It will also provide MAB a potential presence in Singapore.


6. OBLIGATION TO MAKE A MANDATORY OFFER UNDER MALAYSIAN CODE ON TAKE-OVERS AND MERGERS 1998


Pursuant to the signing of the Conditional S&P, MAB is obligated, once the Conditional S&P becomes unconditional, to make a mandatory offer under the Malaysian Code on Take-Overs and Mergers 1998.

7. ASSIGNMENT OF REPRESENTATIVES TO UMBCI

Subsequent to the signing of the Conditional S&P on the Proposed Acquisition, MAB will assign representatives to UMBCI in various capacities to monitor and oversee the business of UMBCI, subject to obtaining the necessary approvals.

8. DIRECTORS' AND SUBSTANTIAL SHAREHOLDER'S' INTEREST

None of the Directors and substantial shareholders of Maybank have any interest, direct or indirect, in the Proposed Acquisition.

9. EFFECTS OF THE PROPOSED ACQUISITION

9.1 Share Capital of Maybank

The Proposed Acquisition will not have any effect on the issued and paid-up share capital of Maybank, as it does not involve any allotment or issue of new Maybank shares.

9.2 Net Tangible Assets ("NTA") of Maybank

The Proposed Acquisition is not expected to have any effect on the NTA of Maybank for the current financial year ending 30 June 1999 as the Proposed Acquisition is expected to be completed after the financial year ending 30 June 1999.

9.3 Earnings of Maybank

The Proposed Acquisition of UMBCI is not expected to have any effect on Maybank's earnings for the current financial year ending 30 June 1999 as the Proposed Acquisition is expected to be completed after the financial year ending 30 June 1999.

Yours faithfully for and on behalf of ASEAMBANKERS MALAYSIA BERHAD
ROHAYA YUSOF Head Corporate Finance	WONG YOKE NYEN General Manager Corporate Finance

KUALA LUMPUR
17 May 1999


COPIES TO : SECURITIES COMMISSION
ATTN : MR SIOW KIM LUN

BANK NEGARA MALAYSIA
ATTN : ENCIK MUHAMMAD BIN IBRAHIM

MALAYAN BANKING BERHAD
 ATTN : ENCIK AHMAD SUBRI ABDULLAH

MAYBAN ASSURANCE BERHAD
 ATTN : ENCIK KASSIM ZAKARIA

 

 

 

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