Proposed restructuration of MCB Group
The Mauritius Commercial Bank Limited (MCB) proposes to separate its Banking and Non-Banking operations and raise capital in order to position the Group for future growth. The name of the new holding company has not yet been finalised. A new legal entity– MCB Holdings – will be incorporated to act as the listed holding company of the Group’s subsidiaries and associates, and three distinct segments -Banking, Non-Banking Financial and Other Investments- will be created.
Shares in the newly created MCB Holdings will be issued to MCB shareholders in exchange for their shares in MCB. Their underlying interests in the Group will thus remain unchanged.
As part of the restructuration, investments in subsidiaries and associates, inclusive of subordinated debt, of approximately Rs 4.6 billion will be transferred out of MCB to MCB Holdings.
This proposed restructuration will reduce MCB’s capital base by approximately Rs 3.1 billion.
Based on Fincorp’s market capitalisation at 31st December 2012. Under current regulations, 50% of fair value gains is included in MCB’s capital base. The Group is currently examining various alternatives, including the issuance of subordinated convertible debt, to raise up to Rs 5 billion in capital in order to compensate for the above reduction and to provide adequate capacity for future growth.
Particulars of the proposed restructuration and the terms and conditions of the capital raising are subject to variations and will be communicated when finalised.
Fincorp Investment Limited will remain a listed company and MCB Group’s shareholding of 57.56% therein will remain unchanged.
The above proposals are subject to approvals by the relevant regulatory authorities and by shareholders.
Image Source: www.mcbgroup.com
Source: Mauritius Commercial Bank