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THE EDGE MARKETS – Bank Pembangunan Malaysia acquires Danajamin Nasional from CGC and MoF Inc
Thursday, 30 September 2021

KUALA LUMPUR (Sept 30): Bank Pembangunan Malaysia Bhd (BPMB) on Thursday announced the signing of agreements with Credit Guarantee Corp Malaysia Bhd (CGC) and Minister of Finance (Incorporated) (MoF Inc) for the 100% acquisition of Danajamin Nasional Bhd.

BPMB said in a statement that the 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.

According to BPMB, the first phase of the plan will see BPMB acquiring all of Danajamin shares from its current shareholders, namely CGC and MOF Inc, turning Danajamin into a wholly-owned subsidiary of BPMB.

As Malaysia’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 is its audited net asset value (NAV) as at June 30, 2021. The deal is expected to close immediately after the completion of the interim audit, most likely in November this year.

BPMB chairman Datuk Seri Nazir Razak said DFIs are an important component of any financial system, and the strengthening of DFIs would enhance their ability to support national economic development by availing capital to borrowers neglected by private banks, providing subsidised capital for priority sectors and crowding in private capital to key segments of the economy.

“Today’s signing is a significant milestone as it not only confirms the merger of BPMB and Danajamin, but 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 [Covid-19] pandemic is a strong reminder for us all of the importance of DFIs as countercyclical lenders for the economy,” he said.

CGC chairman Datuk Mohammed Hussein said the quality of the Danajamin loans portfolio reflects the strong belief of the past and present boards and management of Danajamin that a strong credit culture and risk management framework is critical to the sustainability of Danajamin.

“With the sale of its 50% stake to BPMB, I am confident that this will result in synergistic values to create greater scale and take on wider mandates with greater development impact under the enlarged umbrella of BPMB. I believe there will be exciting days ahead for all stakeholders under the leadership of Datuk Seri Nazir Razak,” he said.

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