KUALA LUMPUR – Bank Pembangunan Malaysia Bhd (BPMB) has signed agreements with Credit Guarantee Corporation Malaysia Bhd (CGC) and Ministry of Finance (Inc) (MoF Inc) for the 100% acquisition of Danajamin Nasional Bhd.
This exercise is part of the government’s medium-term plan to strengthen and align the mandates of development financial institutions (DFIs) to improve the national development finance ecosystem.
In a statement today, BPMB chairman Datuk Seri Nazir Razak said the first phase of the plan will see BPMB acquiring all of Danajamin’s shares from its current shareholders, namely CGC and MoF Inc, turning Danajamin into a wholly owned subsidiary of BPMB.
“DFIs are an important component of any financial system, and the strengthening of our DFIs will enhance their ability to support national economic development by availing capital to borrowers neglected by private banks, providing subsidised capital to priority sectors and crowding in private capital to key segments of the economy.”
He said the signing is a significant milestone as it not only confirms the merger of BPMB and Danajamin, but also formally sets in motion a new phase for Malaysia’s DFIs.
“We at BPMB are fully supportive of the government’s efforts, and will work together with all stakeholders to ensure that the DFI ecosystem is supportive of the needs of the nation, especially in these challenging times.
“The economic crisis caused by the pandemic is a strong reminder for us all of the importance of DFIs as countercyclical lenders for the economy.”
As the country’s first financial guarantee insurance provider, Danajamin will complement BPMB’s existing business and product offerings, with the merger synergies expected to benefit Malaysian businesses, enhancing their access to capital markets and capital in general.
The purchase consideration for Danajamin will be its audited net asset value as of June 30, 2021.
According to the statement, the deal is expected to close immediately after the completion of the interim audit, most likely in November.
To date, Danajamin’s guarantee has assisted 42 issuances across various sectors and brought about a market impact of approximately RM22.7 billion through its risk-sharing collaboration with partner banks.
Danajamin is rated “AAA” by both RAM Rating Services Bhd and Malaysia Rating Corporation Bhd, and regulated and supervised by Bank Negara Malaysia under the Financial Services Act 2013.
Equally owned by both MoF Inc and CGC, Danajamin’s total asset and total shareholders’ equity stood at RM2.71 billion and RM1.9 billion, respectively, as of December 31 last year. – Bernama, September 30, 2021
