KUALA LUMPUR (April 13): RHB Capital Bhd has announced its proposal for an internal reorganisation which will see RHB Bank Bhd taking its parent’s listing status, confirming a report in The Edge Weekly on April 6.

In an announcement today, the bank said the internal reorganisation will entail the transfer by RHB Capital (fundamental: 1.5; valuation: 2.1) of its entire equity interest in RHB Investment Bank Bhd and RHB Insurance Bhd’s subsidiaries, and other operating units of RHB Capital which will be determined later, to RHB Bank.

The bank also announced a rights issue to raise proceeds of up to RM2.5 billion to finance the group’s working capital requirements and meet the requirements of Basel III. The issue price of the shares will be determined at a later date.

After the proposed rights issue, RHB Capital will be distributing its entire shareholding in RHB Bank to entitled shareholders, with RHB Capital ceasing to be a shareholder of RHB Bank.

“Upon completion of the proposed distribution and capital repayment, RHB Bank will assume the listing status of RHB Capital.

“Accordingly, it is proposed that RHB Bank be admitted to the Official List of Bursa Securities in place of RHB Capital, with the listing of and quotation for the entire issued and paid-up share capital of RHB Bank on the Main Market of Bursa Securities,” said the bank.

In a press statement, Kellee Kam, group managing director of RHB Banking Group, said the restructuring would give better capital and tax efficiency for profit growth.

“This is expected to bring us closer to our regional peers and is a catalyst for potential re-rating of the RHB Banking Group. We will continue to remain focused and serve our customers to the best of our abilities,” he said.

RHB Capital closed 1 sen or 0.12% lower at RM8.20, translating into a market capitalisation of RM21.12 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)