Maybank Announces BII to Embark on Rights Issue of Rupiah 1.407 Trillion
Maybank today announced that its subsidiary, PT Bank Internasional Indonesia Tbk ("BII") will embark on a rights issue to raise gross proceeds of approximately Rupiah ("Rp") 1.407 trillion. The rights issue will enable BII to strengthen its balance sheet for continued investments and reinforce its capabilities to achieve long-term growth targets in the Indonesian market. Maybank is the majority shareholder with a 97.52% equity stake in BII.
Dato' Sri Abdul Wahid Omar, President and CEO of Maybank said, "As the majority shareholder, we are committed to the long-term growth of BII and definitely believe in its potential. This injection of equity capital demonstrates Maybank's full support and our unwavering commitment towards strengthening the BII brand/Maybank franchise in Indonesia. It will also provide BII with the financial ability to continue investing in its business and boost its market position."
Ridha Wirakusumah, President Director of BII said: "With the rights issue, BII will improve its capital structure and strengthen its balance sheet for business expansion. We are pleased that Maybank shares our positive view of the business and its potential. With our strengthened balance sheet and investment ability, BII will be able to further improve on its competitive strengths and enhance value creation opportunities, including rewarding our shareholders in the future."
The Rights Issue
The rights issue size of Rp1407 trillion comprises the issuance of 6,253,554,529 new ordinary shares of Rp22.5 each. The rights issue will be on the basis of one (1) new ordinary share in BII for every eight (8) existing ordinary shares in BII at an issue price of Rp225 per rights share. This represents a discount of 22.62% to the Theoretical Ex-Rights Price of BII shares of Rp291 per BII share based on the twenty five (25) days weighted average price of BII shares traded on Bursa Efek Indonesia up to and including 17 February 2010 of Rp299 per BII share. Maybank has agreed to fully subscribe to its rights entitlement under the rights issue and any excess rights shares to the extent they are not taken up or not validly taken up by the other entitled shareholders and/or their renouncees under the rights issue will also be taken up by Maybank.
Use of Proceeds and Rationale
The proceeds from the rights issue after defraying estimated expenses will be used principally for business expansion. It is also part of BII's plan to improve its capital structure and strengthen its balance sheet to spearhead further growth.
Maybank Group has initiated the LEAP 30 performance improvement programme, designed to strengthen leadership in the domestic market and regionally. Concurrently, BII and Maybank embarked on a 3-phase transformation programme for BII, aimed at making BII a market leader in Indonesia. The 3 phases encompass the following:
Phase 1: Re-bound, back to basics
Phase 2: LEAP, Develop winning businesses
Phase 3: Achieve, establish market leadership
Early wins in the transformation programme include BII's rapid growth of its core banking business in the second half in 2009.
Shareholders' Approval and Timing
The rights issue is subject to BII shareholders' approval at the Extraordinary General Meeting of Shareholders to be held on 26 March 2010. Barring any unforeseen circumstances, the rights issue is expected to be completed in Q2 2010.
Maybank was incorporated on 31 May 1960 and commenced operations on 12 September 1960. On 17 February 1962, the bank was listed on the Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Berhad).
Today, it is the largest financial services group in Malaysia with assets exceeding RM330 billion. Its extensive products and services include commercial banking, investment banking, Islamic banking, offshore banking, leasing and hire purchase, insurance, factoring, trustee services, asset management, stock broking, nominee services, venture capital and Internet banking.
The Maybank Group has an extensive global network of 1,750 branches in 14 countries namely, Malaysia, Singapore, Philippines, Brunei Darussalam, Indonesia, Vietnam, Cambodia, Papua New Guinea, Hong Kong SAR, People's Republic of China, Bahrain, Uzbekistan, Pakistan, United Kingdom and the United States of America.
BII was established on 15 May 1959 and licensed as a foreign exchange bank in 1988. Subsequently BII made an initial public offering in 1989 on the Jakarta Stock Exchange and Surabaya Stock Exchange.
BII is one of the largest banks in Indonesia with an international network which has 256 branches (including Syariah branches) and more than 808 BII ATMs across Indonesia. BII is also connected to more than 20,000 ATMs belonging to the network ATM PRIMA, ATM BERSAMA, ALTO, CIRRUS, DBS / POSB, MEPS and to more than 2,000 Maybank ATMs in Malaysia and Singapore. BII also has presence in Mauritius, Mumbai and the Cayman Islands. BII provides a range of financial services through branch offices and ATMs, phone banking and internet banking. BII focused on three (3) business sectors namely SMEs / Commercial, Consumer and Corporate. BII provides products and services to medium-sized companies and commercial entities as well as provides products to individuals such as credit cards, mortgages, deposits, loans and banking services priorities. As for corporate entities, BII's customers are offered services such as trade finance, cash management, lending, custody, investment banking and foreign exchange.