CTOS to make general offer to remaining shareholders of RAM, says may achieve controlling stake

KUALA LUMPUR (June 16): CTOS Digital Bhd has said it will be making a general offer to all remaining shareholders of RAM Holdings Bhd, in which it owns a 19.23% stake currently.

In a statement, it said based on preliminary feedback, whilst CTOS may control more than 51% of RAM, many large shareholders are expected to remain.

"This will provide substantial reassurance that the independence and integrity of RAM will not be compromised," CTOS said.

Earlier this month, shareholders of RAM Holdings, which is the parent of credit rating agency RAM Rating Services Sdn Bhd, had approved a requisition by CTOS to remove the 20% shareholding ceiling in the entity.

Including CTOS, six of RAM's 13 shareholders own substantial stakes, namely Creador IV through Oscar Matrix Sdn Bhd (19.9%), S&P Global Asian Holdings Pte Ltd (19.2%), Tunku Ali Redhauddin Tuanku Muhriz's vehicle Dragonline Solutions Sdn Bhd (15.65%), and Hong Leong Bank Bhd (5.8%).

Creador, through Creador II, is the largest shareholder of CTOS through Inodes Ltd (30.26%).

CTOS, which first bought into RAM in July 2021, earlier said it commenced the investment application on April 15, 2021 and undertook a "rigorous process" with the Securities Commission Malaysia to determine how it could add value to RAM.

Based on past reports, CTOS' acquisition of a 17.23% stake in RAM in the period cost the group RM42.8 million.

On Thursday, CTOS said that it "will not be involved in any rating-related decisions" conducted by RAM's rating committee, and that it will not make any changes to the current independent board aside from nominating one member.

"CTOS will not have access to any of RAM's data or information sources, including the information of the companies that use RAM's services," it added.

"In terms of financials, CTOS will defer to the RAM board on all financial decisions including any dividend policy that RAM may adopt. We support the board's efforts to ensure that RAM remains well capitalised, to ensure its long-term growth and viability," CTOS said.

"Our focus will be to work closely with RAM to strengthen its capacity to develop innovative products and solutions designed particularly for SMEs (small and medium enterprises).

"This will provide more impetus for the growth of SMEs, and support their efforts to access growth capital. It is our intention to help grow the SME industry in Malaysia, which forms the backbone of our economy.

"In addition, we see opportunities to help drive RAM's regional expansion and the further development of Islamic-based rating products," it added.

Shares of CTOS rose one sen or 0.78% to RM1.30 at the time of writing, giving it a market capitalisation of RM3 billion.