The deal, valued at US$49.3 million (approximately RM234.86 million) in cash, also includes an option to sell the remaining 15% stake for US$8.7 million within a 14-month period.
According to a report from The Edge Malaysia, MAA Group disclosed that the total selling price of US$58 million was determined based on an implied price-to-book ratio of about 1.64 times. This calculation was made considering MAA General Assurance’s audited net assets, which stood at RM168.44 million at the end of 2022.
MAA Group has earmarked the proceeds from this disposal for various purposes. A significant portion, RM187.7 million, is allocated for future investment opportunities. Additionally, RM32.18 million is set aside for working capital, RM41.8 million for the repayment of a shareholder’s loan, RM13.54 million for settling intercompany loans, and around RM1.1 million to cover the estimated expenses of the divestment process.
General insurance has been a key revenue generator for MAA Group, accounting for 66% of its total revenue in the financial year ending June 30, 2023. This sector is followed by the hospitality and education services businesses, contributing 16% and 10% to the total revenue, respectively.
While it has been a boon in terms of generating revenue, the board of MAA Group has considered the potential growth and additional capital investment required for the general insurance business. Given the challenging operating environment in the Philippines, the board viewed the offer from Triple P as a timely opportunity for MAA Group to divest from MAA General Assurance and reallocate resources to expand other business segments.