KUALA LUMPUR, Dec 12 ― BIMB Holdings Bhd's (BIMB) shares climbed 11 sen or 2.6 per cent higher to RM4.39 after announcing it will undertake a group restructuring exercise to unlock significant value for shareholders and paves the way for the listing of Bank Islam Malaysia Bhd.
At 10.20am, the counters were among the top 10 gainers on Bursa Malaysia with 148,000 shares changing hands.
RHB Reseach in a note said the restructuring rationale includes finance cost savings with Sukuk redemption of RM52.8 million per annum, business streamlining to enhance supervision and efficiency and to comply with Bank Negara Malaysia’s capital adequacy framework for Islamic banks.
“Based on the pro forma financial statements (which assumes placement at a five per cent discount to its share price), we believe the dilution impact on Bank Islam’s equity base will be limited.
“The impact to earnings should be negligible as well, but earning per share (EPS) may tick upwards due to the lower share base,” it said, added that by on its estimates, the implied Price-To-Book Ratio (P/BV) for Bank Islam from the corporate exercise is about one time P/BV, its against nine-month 2019 annualised return of equity (ROE) 11.8 per cent.
“We deem the implied valuation a bargain, given Bank Islam’s ROE level and being the only shariah-compliant banking stock listed on Bursa Malaysia,” it added.
RHB Research said it make no changes to earnings forecasts (RM802.6 million FY2019) and target price (RM5.10) post announcement.
BIMB in a statement yesterday said the proposed restructuring involves five components -- 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.
Together with internal cash, the placement proceeds will go towards the settlement of outstanding Sukuk with Lembaga Tabung Haji.
As part of the restructuring, BIMB will also undergo an internal reorganisation, whereby it will dispose of its stockbroking and leasing subsidiaries to Bank Islam.
Subsequently, BIMB's entire shareholdings in Bank Islam and Syarikat Takaful Malaysia Keluarga Bhd (STMKB) will be distributed by way of distribution-in-specie to BIMB shareholders.
BIMB will undergo a capital reduction while Bank Islam will undertake a share consolidation.
This is to match BIMB’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 STMKB shares in proportion to their shareholding in BIMB.
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 and enhance its corporate stature. ― Bernama
