MNRB plans rights issue to raise RM400m

PETALING JAYA: MNRB Holdings Bhd proposes to undertake a renounceable rights issue exercise to raise about RM400 million.
The group told Bursa Malaysia, the entitlement basis for the rights issue and the issue price for the rights shares have not been fixed at this juncture, to provide flexibility to the board in respect of the pricing and number of rights shares to be issued.
Of the proceeds raised, some RM300 million is intended to be injected into MNRB’s takaful subsidiaries, namely Takaful Ikhlas Bhd and a new company, was incorporated on June 5, 2017 as a wholly owned subsidiary of Takaful Ikhlas to assume its general takaful business once the necessary approval has been obtained from Bank Negara Malaysia.
This is pursuant to the requirements of the Islamic Financial Service Act 2013, which states that a takaful operator that carries on both classes of family and general takaful businesses, must take steps to split the businesses under separate legal entities before July 1.
Meanwhile, some RM100 million will be pumped into Malaysian Reinsurance Bhd to explore and develop new products for the local market to further solidify its market leadership in the local insurance industry.
“It would also allow Malaysian Reinsurance to prudently and selectively underwrite a more sizeable share of its business portfolio in the overseas market.”
Barring any unforeseen circumstances, the proposed rights issue is expected to be completed in the fourth quarter of 2018.
MNRB’s share price gained 1 sen or 0.4% to close at RM2.34 yesterday with 265,500 shares changing hands.