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Wednesday, 10 October 2007

Takaful Malaysia gets nod for talks with Mideast investors

KUALA LUMPUR: Syarikat Takaful Malaysia Bhd has obtained Bank Negara approval to start talks that could lead to a group of Middle Eastern and Malaysian investors emerging as strategic investors in the takaful operator. A partnership of investors from Abu Dhabi and Malaysia intended to pump new capital into Takaful Malaysia and kickstart its business not only here but also in the Middle East, a source said. “It will look at a strategic investment either through equity or other instruments in Takaful Malaysia,” the source said. It is reported that Takaful Malaysia might partner Middle Eastern investors as the Malaysian company pursues its growth plans, especially in the region. Takaful Malaysia would need a stronger balance sheet if it were to be turned into a bigger Asian and Middle Eastern takaful player. “Takaful Malaysia is the first re-takaful company in the world and that is a big attraction for the new investor,” the source said. Another attraction is the structure of its business in Malaysia, which is said to be more organised than similar takaful operations in the Middle East. “By injecting capital into Takaful Malaysia, the firm would be brought to the next level,” the source said. Should the new investors, which are said to be led by four Abu Dhabi institutional investors, take up a strategic stake in Takaful Malaysia, it could count on being awarded a takaful licence in the United Arab Emirates, the source said. Takaful Malaysia also has operations in Labuan through Asean Retakaful International (L) Ltd and in Indonesia via P.T Syarikat Takaful Indonesia. The company has more than 120 branches in Malaysia. For the year ended June 30, Takaful Malaysia posted a net profit of RM21.2mil, or 13.83 sen a share, which was substantially lower than the RM33.4mil, or 21.86 sen a share, reported in the previous financial year. Takaful Malaysia is controlled by BIMB Holdings Bhd, which underwent a recapitalisation exercise last year that saw Dubai Financial LCC, a unit owned by Dubai Investment Group (DIG), emerging with a 40% stake in Bank Islam Malaysia Bhd, which is controlled by BIMB. The potential deal between Takaful Malaysia and the new investors could follow the steps taken by DIG in recapitalising Bank Islam. - (The Star, 10 Oct 07)

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