Tune Ins to acquire controlling stake in Indonesian insurer

by **Cals** Wed 06 May 2015, 00:19

Tune Ins to acquire controlling stake in Indonesian insurer

KUALA LUMPUR (May 5): Tune Ins Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) has proposed to acquire a 50% stake plus one share in Indonesian insurance provider PT Asuransi Staco Mandiri (ASM) for 82.86 billion rupiah (RM22.9 million).
In a filing with Bursa Malaysia today, Tune Ins (fundamental: 2.7; valuation: 0.35) said it has executed a conditional binding offer letter to acquire 38,235 shares or 23.33% of ASM’s enlarged share capital from the vendors for 26.76 billion rupiah.
The group will also subscribe to the entirety of 43,707 newly issued shares or 26.67% of ASM’s enlarged share capital under the agreement for 30.59 billion rupiah.
To facilitate the acquisition, Tune Ins had entered into a cooperation agreement with PT Cahaya Putratama Abadi (CPA), for the latter to assist the group in becoming the holding company of ASM and also for business development services for the expansion of its insurance business in Indonesia for 25.5 billion rupiah.
“The rationale for the investment in ASM is in line with Tune Ins Group’s objective to expand its insurance business beyond Malaysia to other Southeast Asian markets.
“The Investment in ASM will enable Tune Ins Group to have a controlling interest in a local general insurer in Indonesia, through which Tune Ins Group can directly underwrite its online insurance businesses and offer products through other channels in the fast growing and sizeable markets in Indonesia,” it added.
Tune Ins said the investment in ASM will be financed by internal funds, expecting the acquisition to be completed within three months from May 5, 2015.
Tune Ins shares closed 3 sen or 1.6% lower at RM1.79 today, translating to a market capitalisation of RM1.37 billion.
[size=12](Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)[/size]