KUALA LUMPUR (Jan 3): AMMB Holdings Bhd (AmBank Group) will dispose of AmBank (M) Bhd's and AmBank Islamic Bhd's non-performing loans (NPLs) totalling RM553.91 million to Aiqon special purpose vehicles (SPVs).

The group, which has obtained approval from Bank Negara Malaysia for the proposal, will dispose of RM428.11 million worth of NPLs of AmBank and that of AmBank Islamic worth RM125.8 million. Their porfolios comprise 537,068 accounts and the borrowers include individuals and corporations who had undertaken industrial hire purchase, small and medium industry loans/ financing; auto financing; mortgage; personal loan/ financing under cooperative; and credit cards.

AmBank Group said the proposed disposal is part of the debt recovery strategy of AmBank and AmBank Islamic to strengthen their respective loan/ financing management, resolution processes and to monetise the portfolio.

The proceeds from the proposed disposal will be utilised by AmBank and AmBank Islamic for working capital within one year of completion.

In an exchange filing today, AmBank Group said its wholly-owned subsidiaries AmBank and AmBank Islamic have signed agreements with Aiqon Amanah Sdn Bhd and Aiqon Islamic Sdn Bhd, respectively, for the proposed disposal.

The NPLs are fully written off in the books of AmBank and AmBank Islamic.

Aiqon SPVs, which are wholly-owned subsidiaries of Aiqon Capital Group Sdn Bhd, are established to purchase and manage the portfolios of AmBank and AmBank Islamic.

The two SPVs are parked under Aiqon Capital Group Sdn Bhd -- owned equally by Zetovest Sdn Bhd and Kurnia Quantum -- whose core business is the acquisition and management of non-performing loan assets from banks and financial institutions. To date, it has acquired in excess of RM43 billion, in face value, of NPL assets in Malaysia, Singapore, the Philippines, Thailand, Australia and Spain.

The group executive chairman/chief executive officer and major shareholder of Aiqon Capital is a related party of a director and major shareholder of AmBank Group.

"The proposed disposal is expected to have a positive impact on the financial results of AmBank Group," it added.

Barring any unforeseen circumstances, the proposed disposal is expected to be completed by March 31.

AmBank Group shares closed two sen or 0.46% higher at RM4.33 today, valuing it at RM13.05 billion.