BIMB Integrated Annual Report 2019

57 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONTINUED) (iv) Proposed distribution and capital repayment Proposed distribution of the entire shareholdings of BHB in the Bank and Syarikat Takaful Malaysia Keluarga Berhad (“STMKB”) by way of distribution-in-specie via a reduction and repayment of the entire share capital of BHB in accordance with Section 115 and Section 116 of the Act as well as using the retained earnings of BHB. Prior to the proposed distribution and capital repayment, BHB will undergo a capital reduction and the Bank will undertake a share consolidation. This is to match BHB’s outstanding shares so that the distribution of the Bank shares will be on a one-for-one basis. Upon completion of the proposed distribution and capital repayment, BHB’s shareholders will hold direct equity interest in the Bank and STMKB shares in proportion to their shareholding in BHB and BHB will cease to be a shareholder of the Bank and STMKB. The shareholders through their direct exposure in Bank Islam and STMKB can manage their investment exposure or rebalance their portfolios in banking and takaful industries according to their own investment objectives. Concurrently with the completion of the proposed distribution and capital repayment, BHB will issue two (2) new BHB shares to the Bank such that BHB will become a wholly-owned subsidiary of Bank Islam. (v) Proposed transfer of listing After the completion of the proposed distribution and capital repayment, the Bank will assume the listing status of BHB. Accordingly, BHB proposed that the Bank be admitted to the official list of Bursa Securities in place of BHB, with the listing and quotation of the entire consolidated the Bank shares on the main market of Bursa Securities. The proposed placement, proposed SOA, proposed internal reorganisation, proposed distribution and capital repayment and proposed transfer of listing are not conditional upon each other, save for the following: (i) The proposed distribution and capital repayment is conditional upon the proposed internal reorganisation and proposed transfer of listing; and (ii) The proposed transfer of listing is conditional upon the proposed internal reorganisation and proposed distribution and capital repayment. The Proposals are subject to the approvals and/or consent being obtained from Bank Negara Malaysia (“BNM”), Ministry of Finance (“MoF”) (via BNM), Securities Commission Malaysia (“SC”), Bursa Malaysia Securities Berhad (“Bursa Securities”), shareholders of BHB at an extraordinary general meeting to be convened, shareholder of the Bank, warrantholders at the court-convened meeting, sanction of the High Court of Malaya, the creditors and/or financiers of the BHB Group, the Bank and Identified Subsidiaries, if required and any other relevant regulatory authorities and/or parties, if required. BHB had on 13 December 2019 submitted an application to BNM to seek the approval of BNM and/or its recommendations to MoF for approval for the Proposals. 58 SUBSEQUENT EVENTS On 29 November 2019, the Board of Directors of BIMB Holdings Berhad (“BHB”) had declared an interim dividend of 16.00 sen per ordinary share in BHB for the financial year ended 31 December 2019 and paid on 21 January 2020. From the total dividend amount declared of RM282.3 million, approximately 63% or RM177.8 million was distributed as cash dividend whilst the remaining 37% amounting to RM104.4 million was reinvested to subscribe for 28,381,100 new ordinary shares at RM3.68 each via the Dividend Reinvestment Plan. Due to uncertainty of the macroeconomic outlook as a result of the COVID-19 outbreak, both domestically and globally, the Group expects that the current situation to have an impact on the Group’s earnings for 2020. Nevertheless, BNM had on 24 March 2020 announced an additional measures to assist financing customers affected by the outbreak through automatic 6 months moratorium on all financing payments excluding credit card for individuals and Small Medium Enterprises (“SME”) effective 1 April 2020. As the current situation is unprecedented, and it is very difficult to predict the economic eventualities with high degree of precision, the Group is monitoring the situation closely and continue to assess the possible ramifications on the earnings as the situation develops. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 322 Integrated Annual Report 2019 Group Overview Sustaining The Group Management Discussion & Analysis Group Governance