The Star Malaysia Thursday April 22, 2010
PETALING JAYA: Bank Negara has given its nod to PacificMas Bhd to start talks with the Great Eastern group on the disposal of the former's wholly-owned subsidiary The Pacific Insurance Bhd.
PacificMas told the stock exchange yesterday that Bank Negara had, via its letter dated April 21, said it had no objection in principle for the preliminary negotiations to commence for the disposal of The Pacific Insurance.
Both PacificMas and Great Eastern group would be required to obtain prior approval of the Finance Minister, with the recommendation of the central bank, before entering into any agreement to effect the above disposal, PacificMas said.
Singapore's Oversea-Chinese Banking Corp Ltd (OCBC) is the ultimate holding company of PacificMas and Great Eastern group.
Ever since OCBC announced a conditional takeover of shares it did not already own in listed subsidiary PacificMas in 2008, resulting in it holding a higher stake, talk has been swirling of the impending sale.
It is understood that Bank Negara has said OCBC cannot own two insurance companies in Malaysia, i.e. Great Eastern and PacificMas, which means the banking group has to sell PacificMas' insurance business or merge the insurers.
Previous talks with OSK Holdings Bhd, ACE Synergy Insurance Bhd, Usaha Tegas Sdn Bhd and EON Bank Bhd for the insurance unit failed due to no agreement on pricing.
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