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WHOLESALE BANKING | Cesar Tordesillas, Malaysia
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Tycoon may dispose Muamalat to buy car firm: observers

Industry players are speculating that Tan Sri Syed Mokhtar AlBukhary may sell Bank Muamalat to raise RM3 billion for the purchase of Proton Holdings.

 

Syed Mokhtar's DRB-Hicom bought 42.7 per cent stake in Proton from Khazanah Nasional Bhd via a conditional sale at RM5.50 or RM1.29 billion cash.

Once the deal is completed, expected in two months, DRB-Hicom is obliged to undertake a general offer for the remaining Proton shares at the same price.

It will have to come up with another RM1.73 billion for the remaining 52.28 per cent comprising 314.48 million shares which are not owned by Khazanah.

With such huge amount of cash needed for Proton's purchase, industry observers are saying the tycoon may be looking at a few alternatives, which could include borrowings from foreign banks.

Another alternative is to dispose his assets, such as Bank Muamalat.

With the third round of liberalisation expected in the banking industry soon, analysts said smaller banks would be merged to create large and strong banks.

Hence, it makes sense to dispose Bank Muamalat if the bank is not a large entity sooner or later, smaller banks would have to be sold anyway.

DRB-Hicom is the holding company of Bank Muamalat Bhd, controlling a 70 per cent stake, while state asset manager, Khazanah Nasional Bhd, owns the remaining 30 per cent.

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