Singapore-based Al Falah Investment is awaiting approval from Indonesia’s Financial Services Authority (OJK) to acquire a 50.3 per cent stake in PT Bank Muamalat Tbk, according to the bank’s CEO Achmad Permana.
Al Falah Investment is backed by Hong Kong-based asset management firm SSG Capital Management, according to the prospectus published by Bank Muamalat in April. Al Falah Investment was founded and is partly owned by Indonesian businessman Ilham Habibie, who is the son of former president BJ Habibie.
Bank Muamalat will start the rights issue process officially once it receives OJK’s approval, Permana said. According to its prospectus, Bank Muamalat’s new shares will be traded at Indonesia Stock Exchange between July 1 and 10, with the new share allotment scheduled for July 15.
The public sector bank has received an absolute approval for the Al Falah acquisition from 92.912 per cent of shareholders, it disclosed in a stock exchange filing.
Al Falah Investment will acquire the majority stake in Bank Muamalat by acting as the standby buyer of 77.1 per cent of all new shares issued by the bank, according to the prospectus. The lender plans to raise a total of Rp 2.2 trillion ($153.48 million) through the rights issue.
Ballingal Investment Advisors analyst David Blennerhassett said that Bank Muamalat is categorized as a distressed asset and the Al Falah acquisition will enable the bank to hold onto bigger and better deals.
In its prospectus, Bank Muamalat said the acquisition by Al Falah will enable it to strengthen its capital adequacy ratio.