Takaful may rope in Middle East investors


Syarikat Takaful Malaysia Bhd (Takaful Malaysia) may partner with investors from the Middle East as part of its regional expansion plans, its group managing director Hassan Kamil said.
He said the company had been approached by prospective investors. “The (prospective) partners are not from Asia... possibly from the Middle East,” he told The Edge Financial Daily.
Hassan said that the board would only “revisit the proposals after Raya” and Takaful Malaysia was planning to seek Bank Negara Malaysia’s (BNM) approval to commence discussions with the foreign parties in early November.
On the nature of these partnerships, he said that the foreign investors would potentially take a stake in Takaful Malaysia. “Some of the foreign partners will be joint-venture partners, some will be pure investors. We hope, with the foreign partnerships, to expand both the protection and investment sides of our business,” he added, referring to the company’s product portfolio.
While the exact nature of these partnerships has yet to be finalised, Hassan said the company would permit the foreign partners to subscribe to a maximum of 49% stake in Takaful Malaysia.
Takaful Malaysia’s substantial shareholder is Islamic banking group BIMB Holdings Bhd, which holds a 69.6% stake in the company. The Employees Provident Fund (EPF) owns 6.4% of the takaful operator.
The foreign partners are expected to increase Takaful Malaysia’s capital base and expand its existing operations in Indonesia and Labuan. The company has a 56% Indonesian subsidiary, PT Syarikat Takaful Indonesia and a retakaful insurance company called Asean Retakaful International (L) Ltd in Labuan, of which it owns 63.1%.
According to Hassan, Takaful Malaysia will need to raise a minimum of RM100 million for these subsidiaries alone. He added that the company had not decided how large a capital base it would require, pending the board’s review of the partnership proposals.
“With the new partners, we have to decide how and what to expand and whether we want to acquire a new company or not,” he said.
The Indonesian market remains a challenging one for the company, which is in preliminary discussions with a few banks. “We are still trying to find a syariah-compliant bank in the country to partner with,” Hassan said, adding that it was challenging finding the right partner as most banks in Indonesia had Islamic windows, while Takaful Malaysia preferred to partner with a standalone Islamic bank.
“If we don’t find a partner, we may have to appoint more agents in the country, which is going to be a costly affair,” he said. He added that upon receiving Bank Negara’s approval and finalising agreements with foreign investors, Takaful Malaysia hoped to embark on its regional expansion plans in mid-2008.

Hassan said that the company hoped to double its total asset size in Indonesia, which stood at RM180 million as at June 2007, five years from now
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