KUALA LUMPUR (June 20): MAA Group Bhd, which is exiting the insurance sector in Malaysia, will be using the RM290.49 million from the proposed disposal of its Takaful business to acquire businesses in the manufacturing and education services sector.
MAA Group chief executive officer Datuk Muhamad Umar Swift said the group is exiting the insurance business in Malaysia and needs to find new domestic businesses to grow the group.
"Because we are no longer limited to financial services only, we will be looking at manufacturing, and we are interested in education services.
"However, that being said, we are also mindful there is a general view that moving into 2017, there are negative headwinds in businesses. So when you are looking at an asset today, you have to be cognizant of the fact that the existing shareholder might wish to exit for specific reason; we are being cautious about that," he added.
He admitted that the manufacturing and education businesses are crowded, and not something MAA Group has done previously.
"We have the financial capability. We have a bit of management capability but we are not industry expert, so that is what is on the mind of the board," he added.
He said the group is looking for businesses that provide revenue stream and are priced correctly.
"We are actively valuing a few opportunities, but I am unable to share with you at this juncture," he said, adding that the group is looking at acquiring four companies that is unrelated to the insurance business.
The group and Solidarity Group Holding BSC had proposed to sell MAA Takaful Bhd for RM525 million to Zurich Insurance Co Ltd.
MAA Group, which owns 75% equity in the company, can have gross sale proceeds of RM393.75 million. The group has declared a special dividend of 35 sen per share. The shareholders will vote for the proposed disposal next Tuesday.
The group, which is currently in Practice Note 17 status after it disposed of its core business, Malaysian Assurance Alliance Bhd, on Sept 30, 2011, is looking to lift itself from the status in 12 to 18 months from June 30, when the group submits its regularisation plan to Bursa Malaysia.
As part of its regularisation plan, MAA Group will increase its stake in the MAA General Assurance Philippines Inc to more than 51% equity in the group, from the existing 40%.
"We will increase our interest to make it our subsidiary. We want to exert our control in the company," Muhamad Umar told a press conference after the annual general meeting today.
He said the company is the 69th general insurance company in the Philippines and is a well-run company.
However, the group is uncertain about whether it will increase its stake in the Columbus Capital Pty Ltd, a company involved in the home mortgage business in Australia, to 55% from the existing 47.95%.
"Currently, the company has a low portfolio, approximately AU$1.5 billion (RM4.55 billion), but we'll see how it grows.
"The business in Australia is mono-line business, i.e. only doing home mortgages. I think it needs diversifying current streams to be something we want to take up more of," Muhamad Umar added.
At 12.15pm, MAA Group traded unchanged at RM1.17, with 134,700 shares changing hands, for a market capitalisation of RM333.95 million.