KUALA LUMPUR (Oct 22): CIMB Group Holdings Bhd (KL:CIMB) on Thursday “categorically” denied planning to privatise its Indonesian unit.
No decision has been made and there was no formal proposal for the potential privatisation of CIMB Niaga, the second-largest Malaysian bank by assets said in a statement in response to news reports about the move.
“CIMB Niaga remains an integral part of the group’s regional footprint, and the group remains committed to its operations in Indonesia,” the bank said.
The statement follows news reports citing analysts who attended a briefing led by CIMB chief financial officer Khairul Rifaie ahead of the closed period.
During the briefing, three options were reportedly discussed — privatisation, a secondary offering, and placement of shares to strategic investors. A privatisation is currently the “more strategic and credible option” out of the three, CIMB Securities, the group's own research arm, said in a note.
“The group will continue to meet all applicable regulatory guidelines, including minimum free float requirements in a timely and structured manner,” CIMB said on Thursday without elaborating further.
Under the newly-revised minimum free float regulations, CIMB is required to reduce its shareholding in Niaga from 91.4% to at least 87.5% by March 2027 and to 85% by March 2028 as part of a move to boost investability of Indonesian stocks.
However, a potential downgrade of the country’s status to ‘emerging market’ to ‘stand-alone market’ by MSCI have resulted in a sharp sell-off in Indonesian stocks across the board, reducing the appeal of Niaga. CIMB also has to overcome regulatory hurdles with any proposals.