DRB-Hicom seals RM518m deal to dispose of Uni.Asia Life

by **Cals** Thu 26 Dec 2013, 07:12

Posted on 25 December 2013 - 05:38am

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PETALING JAYA (Dec 25, 2013): DRB-Hicom Bhd is selling its stake in Uni.Asia Life Assurance Bhd (UAL) for RM518 million following the Finance Ministry's approval of the proposed disposal.

DRB-Hicom through Uni.Asia Capital Sdn Bhd (UAC), which owns a 100% stake in UAL had entered into a conditional sale and purchase agreement with Pramerica BSN Holdings Sdn Bhd yesterday.

The agreement is for the sale of 125 million ordinary shares of RM1 each in UAL, representing 100% of the issued and paid-up share capital of UAL. The sale consideration of RM518 million will be satisfied in cash.

"The board of directors of the company believes that UAL has grown to reach a size and market position whereby it would benefit from a tie-up with a strong and strategic global insurance operator to spur its next phase of growth. As such, the proposed disposal provides a timely opportunity for DRB-Hicom to unlock the value of its investment in UAL," said DRB-Hicom in a filing with Bursa Malaysia yesterday.

It said that the proposed disposal is expected to increase the earnings and earnings per share of the DRB-Hicom Group for the financial year ending March 31, 2014 as the proposed disposal is expected to be completed in the first quarter of 2014.

"The DRB-Hicom Group expects to realise a gain on disposal arising from the proposed disposal. For illustrative purposes and based on the audited financial statements of the DRB-Hicom Group for the financial year ended March 31, 2013, the completion of the proposed disposal would result in a proforma gain on disposal of about RM53.1 million to the DRB-Hicom Group based on the sale consideration of RM518 million," it added.

On Aug 15, 2013, the group submitted an application to Bank Negara Malaysia (BNM) for the approval of the Finance Ministry to review a proposal for UAC to enter into a sale and purchase agreement with a company to be respectively owned by The Prudential Insurance Company of America and Bank Simpanan Nasional on a 70:30 shareholding basis (known as Pramerica BSN Holdings).

The group received the Finance Ministry's approval for the proposed disposal through BNM via a letter dated Dec 18 which was received on Dec 19.