Bursa Malaysia to buy out derivatives clearing arm

Source: Bursa Malaysia Berhad

Bursa Malaysia Berhad ("Bursa Malaysia") today announced that it has entered into a Sale and Purchase Agreement ("SPA") with its wholly-owned subsidiary, Bursa Securities Clearing Sdn Bhd to acquire 100% equity stake in Bursa Malaysia Derivatives Clearing Berhad ("Bursa Derivatives Clearing").

This SPA signifies an internal transfer within the Bursa Malaysia group.

Under the SPA, Bursa Malaysia will acquire 20 million ordinary shares of RM1.00 each in Bursa Derivatives Clearing for a total cash consideration of RM1.00. Bursa Derivatives Clearing was incorporated on 9 September 1995 as a public limited company and commenced its business in December 1995. Bursa Derivatives Clearing provides, operates and maintains a clearing house for the futures and options exchange. Bursa Derivatives Clearing's authorised share capital is currently RM25 million divided into 20 million ordinary shares of par value RM1.00 each and 5 million redeemable preference shares of RM1.00 each. As at the date hereof, the issued and paid-up share capital is RM20 million comprising 20 million ordinary shares of RM1.00 each.

"The proposed transfer, which is an internal restructuring exercise, will enable us to streamline the Group’s structure more efficiently in line with our aim to improve business efficiency and achieve economies of scale across operations," said Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia.

The proposed transfer will not have any impact on the earnings of Bursa Malaysia group since it is an internal transfer. The proposed transfer is pending approval of the Foreign Investment Committee and the Minister of Finance. It is expected to be completed by end of September 2006.

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