Description and Announcement Details : AFFIN HOLDINGS BERHAD ( AHB OR THE COMPANY ) PROPOSED REORGANISATION OF THE AHB GROUP OF COMPANIES Reference is made to the announcements dated 16 February 2017, 20 February 2017, 14 July 2017, 21 July 2017, 28 August 2017 and 21 September 2017 in relation to the above ( Announcements ). Unless otherwise defined, all the abbreviations and definitions used in this announcement shall have the same meaning as the words and expressions used in the Announcements. 1. INTRODUCTION On behalf of the Board of Directors of AHB ( Board ), AFFIN Hwang Investment Bank Berhad ( AHIB ) had on 16 February 2017 announced that the Company and AFFIN Bank Berhad ( ABB ) intend to undertake the following proposals: Proposed transfer by AHB of the following identified companies to ABB: AHIB, a wholly-owned subsidiary of AHB; AFFIN Moneybrokers Sdn Bhd, a wholly-owned subsidiary of AHB ( AMB ); AXA AFFIN Life Insurance Berhad, a 51.00%-owned joint venture company of AHB ( AALI ); and AXA AFFIN General Insurance Berhad, a 37.07%-owned associate company of AHB ( AAGI ), (AHIB, AMB, AALI and AAGI shall collectively be referred to as the Identified Companies and item above shall now be referred to as the Reorganisation ); Proposed distribution of the entire shareholdings in ABB held by AHB to the entitled shareholders of AHB whose names appear in AHB s Record of Depositors on an entitlement date to be determined and announced by the Board at a later date ( Entitlement Date ) ( Entitled Shareholders ), after the completion of the Reorganisation, on the Entitlement Date by way of a distribution-in-specie via a reduction of the following: the entire consolidated capital of AHB (which includes the entire issued and paidup share capital of AHB and the entire share premium account of AHB); and the retained profits of AHB, (item above shall be referred to as the Proposed Distribution ); (iii) (iv) (v) (vi) Proposed subscription by ABB of 2 new ordinary shares in AHB ( AHB Shares ) which will be undertaken simultaneously with the Proposed Distribution ( Proposed Subscription ); Proposed amendments to the Constitutions of AHB and ABB to facilitate the Proposed Transfer of Listing Status (as defined below) ( Proposed Amendments ); Proposed transfer of the listing status from AHB to ABB on the Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( Proposed Transfer of Listing Status ); and Proposed members voluntary winding-up of AHB in accordance with the Companies Act, 2016 ( Act ) ( Proposed Winding-Up ), (the above shall collectively be referred to as the Proposals ). Further to the above, on behalf of the Board, AHIB wishes to announce the following: 1
(a) (b) AHB has on 2 October 2017 entered into a share sale agreement ( SSA ) with ABB in relation to the Reorganisation; and AHB and ABB have on 2 October 2017 submitted an application to Bursa Securities for the Proposed Transfer of Listing Status. Further details on the above are set out below. 2. REORGANISATION 2.1 Details of the Reorganisation AHB and ABB have on 2 October 2017 entered into the SSA to transfer the entire shareholdings held by AHB in the Identified Companies to ABB in relation to the Reorganisation. The details of the Identified Companies are set out below: Identified Companies Total issued share capital No. of shares held by AHB as at the date of this announcement No. of shares (%) Principal activities AHIB 780,000,000 780,000,000 100.00 Provision of investment banking services AMB 1,000,000 1,000,000 100.00 Moneybroking AALI 368,000,100 187,680,051 51.00 Underwriting of life insurance business AAGI 119,047,619 44,134,963 37.07* Underwriting of general insurance business Note: * As announced on 4 August 2017 and 18 September 2017, AHB proposed to acquire an additional 7.07% equity interest in AAGI. Pursuant to the Reorganisation, the additional 7.07% equity interest in AAGI to be acquired by AHB shall be transferred to ABB. In accordance with the terms of the SSA, the final Transfer Consideration for the Identified Companies will be determined based on their respective carrying value recorded by AHB in its unaudited management accounts as at the last day of the calendar month immediately prior to the calendar month in which all the conditions precedent ( Conditions Precedent ) set out in Section 2.2(a) below are fulfilled ( Cut- Off Date ). 2
In this regard, the Cut-Off Date for the Transfer Consideration of the Identified Companies shall be fixed as at 30 September 2017 as all the Conditions Precedent have been fulfilled on 2 October 2017. The details of the final Transfer Consideration shall be announced in due course. 2.2 Other salient terms of the SSA The other salient terms of the SSA are as follows: (a) The agreement to sell and purchase the shares of the Identified Companies as at the Cut-Off Date ( Sale Shares ) is conditional upon the satisfaction of the following conditions ( Conditions Precedent ): (iii) the members of ABB approving the resolution on the Reorganisation (the approval of which has been obtained on 2 October 2017); all the necessary regulatory approvals required in respect of the proposed acquisition of the Identified Companies by ABB having been obtained on terms satisfactory to ABB and such approvals remaining in full force and effect (all the necessary regulatory approvals required have been obtained on 13 July 2017 and 14 July 2017); and the approvals or consent from third parties being obtained, namely the lenders of AHB and the Identified Companies (all the relevant approvals or consent from third parties have been obtained as at the date of this announcement). (b) Transfer Consideration The consideration for the purchase by ABB of AHB s equity interest in the Identified Companies shall be determined based on the carrying value of the Identified Companies set out in the unaudited management accounts of the respective Identified Companies, as at the Cut-Off Date. The carrying value comprises AHB s cost of investment in the Identified Companies and its share of postacquisition profits recorded by the respective Identified Companies, as determined by AHB. The transfer consideration shall be satisfied partly in cash and partly in shares: by the payment from ABB to AHB of the cash sum for the transfer of AHB s shareholding in AAGI to ABB ( Cash Consideration ); and by the issue and allotment of 254,178,931 new ABB Shares at the issue price, to be determined as at the Cut-Off Date by ABB to AHB, pursuant to the transfer of AHB s shareholding in AHIB, AMB and AALI to ABB ( Consideration Shares ). 3
(c) Completion The SSA shall complete within 14 business days following fulfilment or waiver of all the Conditions Precedent, whichever is later (or such other date as may be agreed in writing between ABB and AHB): On completion, AHB shall deliver or make available to ABB: (aa) (ab) (ac) evidence of the due fulfilment of all the conditions specified in Section 2.2(a) above; share transfer forms of the Sale Shares duly executed by the registered holders in favour of ABB accompanied by the relevant share certificates and the stamp duty documents; and a certified copy of the resolution(s), adopted by the Board authorising the sale of the Sale Shares as well as the registration of ABB as the holder of the Sale Shares in the register of members of each of the Identified Companies and the entry into and performance of the SSA. On completion, ABB s obligations shall be to: (aa) (ab) (ac) (ad) (ae) deliver to AHB a certified copy of the minutes of its Board of Directors meeting authorising the acquisition of the Sale Shares from AHB and approving the issuance and allotment of the Consideration Shares to AHB; deliver to AHB a certified copy of the minutes of its Board of Directors meeting authorising the execution by ABB of the SSA and of any documents to be entered into pursuant to or in connection with the SSA; furnish the Registrar of Companies with a duly completed return of allotment of shares in respect of the Consideration Shares to be issued and the name of AHB for the purpose of receiving the Consideration Shares; deliver to AHB a copy of the return of allotment of shares issued and furnished to the Registrar of Companies in respect of the Consideration Shares and share certificate in relation to the Consideration Shares (upon request by AHB); and pay the Cash Consideration to AHB. (d) Termination Events The SSA may be terminated prior to completion upon the occurrence of, amongst others, the following events: If the Conditions Precedent are not satisfied or waived on or before the date falling 6 calendar months after the date of the SSA, or such other date as may be mutually agreed by the parties (all the Conditions Precedent have been fulfilled today); By ABB, if it shall be found that any of the warranties was, when given, or will be or would be, at completion (as if they had been given again at completion) not complied with or otherwise untrue or misleading; and 4
(iii) By ABB, if AHB has breached any term of the SSA (including without limitation, AHB s obligations and undertakings set out in the SSA). Further, if the obligations set out in Sections 2.2(c) to above are not fully complied with by AHB or ABB (where applicable) by or on the date set for completion, either party shall be entitled by written notice to the other party, to terminate the SSA without liability on the part of the terminating party in respect of non-compliance by the other party. All the Conditions Precedent have been fulfilled today and hence the SSA has become unconditional effective 2 October 2017. 2.3 Approvals required for the Reorganisation The approvals required for the Reorganisation are as follows: (iii) BNM and the MOF (on recommendation of BNM) which has been obtained on 13 July 2017; SC for the change in controller of AHIB, AHAM and AIIMAN, being holders of the Capital Markets and Services Licence issued by the SC, which has been obtained on 14 July 2017; and the approvals or consent from third parties, namely the lenders of AHB and the Identified Companies (all the relevant approvals or consent from third parties have been obtained as at the date of this announcement). 2.4 Timeframe for completion The Reorganisation is expected to be completed within the month of October 2017. 2.5 Group Structure Upon completion of the Reorganisation: AHIB and AMB will be wholly-owned subsidiaries of ABB; AALI will be a 51%-owned joint venture company of ABB; and AAGI will be a 37.07%-owned associate company of ABB. Notwithstanding the above, AHB remains as the holding company of the AHB Group upon completion of the Reorganisation and shall remain as the holding company of the AHB Group until the completion of the Proposed Distribution, Proposed Subscription and Proposed Transfer of Listing Status. The group structure of the AHB Group (with the material subsidiaries of AHB) before and after the Reorganisation is set out in Appendix I. 2.6 Documents available for inspection A copy of the SSA will be made available for inspection at the registered office of AHB at 7 th Floor, Chulan Tower, 3 Jalan Conlay, 50450 Kuala Lumpur during normal business hours from 8:30 a.m. to 5:30 p.m. from Mondays to Fridays (excluding public holidays) for a period of 3 months from the date of this announcement. In addition, all the other details pertaining to the Reorganisation had been set out earlier in the Announcements. 5
3. PROPOSED TRANSFER OF LISTING STATUS To facilitate the Proposed Transfer of Listing Status, AHB and its wholly-owned subsidiary, ABB, had on 2 October 2017 submitted an application to Bursa Securities through AHIB for the following: (a) (b) proposed withdrawal of AHB s listing status and the ordinary shares of AHB from the Official List of Bursa Securities, and the admission of ABB and the entire enlarged issued share capital of ABB to the Official List of Bursa Securities in place of AHB; and the listing of and quotation for the entire enlarged issued share capital of ABB on the Main Market of Bursa Securities. The Board expects that the Proposed Transfer of Listing Status to be completed within the first half of 2018. This announcement is dated 2 October 2017. 6