MBSB (1171) - EPF increases stake in MBSB after rights issues

MBSB (1171) - EPF increases stake in MBSB after rights issues
MBSB (1171) - EPF increases stake in MBSB after rights issues

PETALING JAYA: The Employees Provident Fund (EPF), which has a long-term plan to reduce its stake in Malaysia Building Society Bhd (MBSB), now controls 65.4% of the company following MBSB’s recent rights issue.

Bursa filings showed that the fund now owns 3.79 billion shares in the non-bank financial services provider after subscribing to 1.89 billion of the rights issues on July 29.

Prior to this as at March 6, the fund held a 65.098% stake or 1.84 billion shares in the company. This meant it had also applied for an over allotment, hence rasing its stake slightly.

Earlier this week, Tan Sri Chua Ma Yu had raised his stake in MBSB to 8.97% from 6.06% through subscription of the company’s rights issue. The seasoned investor who was co-founder of Rashid Hussain Securities, emerged as a substantial shareholder in MBSB in March this year,

Shares of MBSB last traded at 78 sen, up by 1,5 sen.

MBSB completed its cash-call exercise at the end of last month, with the full subscription and listing of 2.9 million rights shares in the company on Bursa Malaysia Securities.

The company announced the corporate exercise in March, with the intention of raising up to RM2bil to meet its capital requirement. The price of its rights issue was fixed at RM1 each and the entitlement basis of one rights share for every existing MBSB share held.

In a filing with Bursa Malaysia, MBSB explained that the rights shares were at RM1 each, of which the first call of 59 sen for each rights share would be payable in cash on application and the second call of 41 sen for each rights share would be capitalised from MBSB’s share premium account.

It said the first call of 59 sen represented a discount of 29 sen or approximately 33% to the theoretical ex-rights price of MBSB shares of 88 sen based on the five-market day volume weighted average price of MBSB shares up to and including June 8, being the last trading date prior to the date of this announcement, of RM1.1739.

EPF ended up with a large stake in the company due to legacy issues from the 1998 financial crisis and had previously indicated that it wants to partially divest its stake in the company.

MBSB (1171) - EPF increases stake in MBSB after rights issues