PETALING JAYA: Malaysia Building Society Bhd (MBSB) plans to implement a members’ scheme of arrangement which would involve the disposal of its non-financial subsidiaries.
The five subsidiary companies which are involved in the property development business will be transferred to a corporate share trustee, said MBSB in a bourse filing today.
As of the end of 2022, the five companies – MBSB Development Sdn Bhd, Prudent Legacy Sdn Bhd (in liquidation), MBSB Properties Sdn Bhd, 88 Legacy Sdn Bhd, and Definite Pure Sdn Bhd – had collective negative net liabilities totalling RM1.105 billion.
The scheme would also entail the disposal of MBSB’s non-performing conventional loans, valued at RM279 million, via a cash settlement on a deferred basis.
MBSB’s strategic move to implement this scheme reflected its intent to transform into a pure investment holding company, divesting itself of loans and direct stakes in non-financial service entities.
This decision follows a previous scheme of arrangement undertaken by MBSB in 2018, coinciding with its acquisition of Asian Finance Bank, which is now known as MBSB Bank Bhd.
Disposal deadline extended
MBSB has secured a vesting order to identify residual conventional financial assets and liabilities and non-financial subsidiaries, which will be disposed of to third parties.
The deadline for the disposal of these assets and subsidiaries, initially set for July 2021, has now been extended to April 2024.
MBSB also intends to transfer its stake in wholly-owned special purpose vehicle (SPV), Emerald Unity Sdn Bhd, to a corporate share trustee.
Emerald Unity was established as an SPV to hold the residual assets and liabilities following the execution of the proposed scheme.
Following the transfer, MBSB will divest the five aforementioned subsidiaries to Emerald Unity for RM2 each.
Despite Emerald Unity becoming the future rightful owner of these assets, MBSB said they will continue to be recognised in its books.
“MBSB is regarded as still retaining substantially all the risks and rewards of the assets’ ownership,” it said.
Meanwhile, MBSB is currently in the process of acquiring Malaysian Industrial Development Finance (MIDF) from Permodalan Nasional Bhd (PNB) through a RM1.01 billion share deal.
This transaction will result in the formation of a merged entity boasting assets exceeding RM60 billion.
The deal, which will see PNB owning 12.78% of MBSB, is set to be concluded in the third quarter of this year.
As at 12.27pm, MBSB’s share price was up by 0.5 sen (0.68%) at 74 sen, valuing the company at RM5.24 billion.