KUALA LUMPUR (Dec 18): CIMB Group Holdings Bhd is estimated to record a gain on disposal of RM200 million from the proposed transfer of its stockbroking business to Jupiter Securities Sdn Bhd.

In a filing with Bursa Malaysia, CIMB said the consideration in connection with the business transfer will be satisfied in cash. 

It was determined based on the future prospects and net asset value of the in-scope business as at Dec 31 2015, which amounted to RM565.6 million.  The consideration is subject to closing audit adjustments, if any.

The estimated gain on disposal of RM200 million is after taking into account the premium on the disposal of RM433 million and goodwill attributable to the business, CIMB added.

CIMB Group Sdn Bhd (CIMBG), China Galaxy International Financial Holdings Ltd and CGS-CIMB Holdings Sdn Bhd today signed a share subscription agreement for the subscription of new shares in CGS-CIMB.

CIMBG is a wholly owned subsidiary of CIMB while China  Galaxy International Financial Holdings Ltd is a wholly-owned subsidiary of China Galaxy Securities Co Ltd (CGS).

CGS-CIMB Holdings will function as the holding company for the Malaysia stockbroking business of the CGS-CIMB joint venture.

At completion, CIMBG and CGI will be 50:50 shareholders in CGS-CIMB Holdings.

Following the signing of the share subscription agreement, the parties will proceed to effect the transfer of the Malaysia stockbroking business of CIMB Group into Jupiter Securities.

This will entail the sale of CIMB Investment Bank Bhd’s (CIMG IB) cash equities business to Jupiter Securities, sale of CIMB Bank Bhd’s equity financing services business and share margin financing granted in connection with the cash equities business to Jupiter Securities, and sale of CIMB IB’s 100% equity interest in CIMB Futures Sdn Bhd to Jupiter Securities.

Jupiter Securities is a wholly-owned subsidiary of CGS-CIMB Holdings and will be the operating company for the stockbroking business of the CGS-CIMB joint venture in Malaysia.

Upon completion of the share subscription and the proposed business transfer, it will be renamed as CGS-CIMB Securities Sdn Bhd.

CIMB shares closed down by 1.4% today to RM5.63, for a market capitalisation of RM53 billion.