- Malayan Banking Berhad (Maybank) announced that its 88%-owned Indonesian subsidiary, PT Bank Internasional Indonesia Tbk (BII) had on 23 July 2013 completed its right issue exercise of 4,690mil new ordinary shares of Rupiah (Rp) 22.5 each at a rights issue price of Rp320 per Rights Share. The rights issue basis is 1 new right for every 12 shares.

- The total proceeds raised from the rights issue amounted to approximately Rp1.5 trillion, or about USD146mil or RM466mil.

- Maybank through its wholly-owned subsidiaries, Maybank Offshore Corporate Services (Labuan) Sdn Bhd and Sorak Financial Holdings Pte Ltd had fully subscribed for their respective entitlements under the rights issue.

- In addition, PT Kim Eng Securities (KES), an 80%-owned subsidiary of Maybank, acted as the standby buyer for the rights issue. KES had exercised its obligation to subscribe for 12,104,594 rights shares which were not taken up by the other entitled shareholders under the rights issue.

- Following the completion of the rights issue, Maybank Group’s equity interest in BII is maintained at around 88.3%.

- The rights issue is not new and has been indicated by Maybank previously. The rights issue is to fund BII’s working capital. The press reported that the rights issue will raise BII’s capital adequacy ratio to 15.1% on a pro-forma basis from 13.4% in end-March 2013.

- We estimate average cost of BII, for Maybank (assuming before including the provision for impairment of RM1.6bil made in FY09) of BII shares now at Rp434, from Rp443, following this rights issue.

- If we are to reflect in the provision for impairment of RM1.6bil made in FY09, we estimate average cost of BII shares now at Rp350, from Rp353 previously, following this rights issue.

- BII’s rights issue is within expectations. Maintain HOLD on Maybank.

Source: AmeSecurities