KUALA LUMPUR (Oct 18): Affin Bank Bhd has announced a single-tier special dividend of 18.09 sen per share following the divestment of a 63%-stake it owns in Affin Hwang Asset Management Bhd (AHAM) that was completed on July 29, 2022.

Apart from the proposed special dividend, Affin Bank has also proposed an interim dividend of 4.53 sen, amounting to RM100.2 million, for the financial year ending Dec 31, 2022 (FY22).

The total special dividend amounted to RM400.2 million, about 28.23% of the total proceeds of RM1.42 billion from the divestment.

The bulk of the proceeds amounting to RM1 billion will be allocated to fund Affin Bank group’s banking activities and/or working capital requirements, while the remaining RM16.6 million will be utilised to defray fees related to the divestment.

Of the 18.09 sen special dividend, Affin Bank said 10.85 sen will be paid in cash and the remaining 7.24 sen can be elected to be reinvested into a new Affin Bank share pursuant to the dividend reinvestment plan.

The proposed special dividend, which is subject to the approval Affin Bank’s shareholders, is expected to be paid by end-December 2022.

“The proceeds from the divestment were originally intended to be utilised mainly to fund Affin Bank group’s banking activities and/or working capital requirements.

“[While] the proposed special dividend is intended to reward the shareholders of Affin Bank for their continuous support toward the Affin Bank group, after taking into consideration sufficient capital buffer for the Affin Bank group and reassessment of Affin Bank group’s working capital requirements to catalyse substantial growth in its lending operations,” said Affin Bank in a bourse filing.

To recap, AHAM was disposed to Starlight Asset Sdn Bhd, an investment holding company incorporated by funds managed by CVC Capital Partners.

“The proposed divestment provides an avenue for Affin Bank to unlock and realise the value of its investment in Affin Hwang Asset Management at an attractive premium,” Affin Bank said.

Affin Bank said its original date of investment in Affin Hwang Asset Management was on April 7, 2014, when the seven million shares in Affin Hwang Asset Management were acquired for RM282.13 million from Hwang-DBS (M) Bhd and Tunku Datuk Seri Nadzaruddin Ibni Almarhum Tuanku Ja’afar.

Affin Bank’s share price closed unchanged at RM2.02 on Tuesday (Oct 18), which gives the bank a market capitalisation of about RM4.47 billion.

Year-to-date, the stock has surged 16.76% or 29 sen from RM1.73 since Jan 3 this year.