KUALA LUMPUR (Nov 16): MAA Group Bhd emerged as one of the top gainers, after announcing a plan to divest an 85% stake in its wholly-owned Philippine general insurance business — MAA General Assurance Philippines Inc — to Triple P Philippines Pte Ltd for US$49.3 million (about RM234.86 million) cash.

Shares in MAA opened 15.5 sen or 34.83% higher at 60 sen on Thursday, and rose further to hit an intraday high of 61 sen, their highest in 13 months.

The stock then closed at 44.5 sen, still up 10 sen or 28.99%, giving the group a market value of RM117.36 million. The counter saw a total of 11.84 million shares changing hands, 73 times its two-month average of 161,750 shares.

On Wednesday, the group said that following the divestment, it will allocate RM187.7 million of the proceeds for future investment opportunities, RM32.18 million for working capital, RM41.8 million for repayment of shareholder loans, RM13.54 million for repayment of inter-company loans, and the remaining RM1.1 million for estimated expenses for the divestment process.

MAA said as its original cost of investment since 2001 amounted to RM78.16 million, it expects to realise a gain on disposal of about RM110.75 million.

The proposed divestment comes with an option to dispose of the remaining 15% stake in the unit to Triple P for US$8.7 million within a 14-month period. The divestment requires shareholders’ approval via a general meeting.

General insurance is MAA’s largest revenue contributor, representing 66% of total revenue for the financial year ended June 30, 2023, followed by the hospitality business’ 16% and education services’ 10%.

MAA has posted mixed performance following its last disposal completed back in 2016 — a 75% stake in MAA Takaful Bhd to Zurich Insurance Co Ltd for RM393.75 million cash.

In 2019, a proposed privatisation of the cash-rich company by its largest shareholder Tunku Datuk Yaacob Khyra was rejected by shareholders. Yaacob has a deemed interest of 41.81% in MAA through Melewar Group.

Since then, MAA went for investment opportunities, including in 2021, when it acquired 132.15 million shares or a 57.78% stake in Turiya Bhd for RM23.79 million, and 346 million shares or a 10.35% stake in KNM Group Bhd for RM82.27 million, as well as other smaller acquisitions.

As at end-June 2023, MAA had a net cash position of RM19.32 million, down from its peak of RM329 million at end-June 2019.

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MAA Group sells 85% stake in Philippines general insurance unit for US$49.3m