CIMB Group raises RM3.55 billion in new equity

Issues 500 million new shares.

According to a release, in a move to strengthen its capital position, CIMB Group announced today that it will be issuing 500 million new shares equivalent to 6.08% of its enlarged share capital following an accelerated book-build private placement exercise.

The new shares will be issued at a price of RM7.10 per share, equivalent to a 2% discount to the volume weighted average price traded on Friday, 10 January of RM7.26. Total proceeds from the new issue will amount to RM3.55 billion.

"We are delighted to have been able to expeditiously raise such a substantial amount of common equity tier 1 (CET1) to bolster our capital position. While we have always sought to operate at optimal capital levels, the sharp depreciation of the Rupiah over 2013 has set back our capital accumulation plan. We have acted decisively to reposition our capital for growth," said Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group.

The new issue lifts CIMB Group's CET1 as at 30 September 2013 from 8.2% to approximately 9.7%. The new equity was placed to domestic and foreign investors over the course of the working day on Monday, during which the stock was suspended from trading on Bursa Malaysia.

The offer was well oversubscribed and enabled CIMB to increase the deal size by 25% from 400 to 500 million shares."We are gratified by the strong support shown by investors at home and across the globe, enabling the deal to be priced at a tight discount to latest market prices.

It is a great endorsement for our franchise and growth strategy. With the new capital we stand strong to face any future volatility in financial markets and can continue to grow our business at our desired pace going forwards," Nazir added.

CIMB shares will resume trading on Bursa Malaysia on Wednesday, 15 January 2014, while the new shares are scheduled to be issued on 22 January 2014 and listed on Bursa Malaysia on 23 January 2014.

The deal was advised by CIMB Investment Bank, while CIMB Investment Bank, Bank of America Merrill Lynch and Credit Suisse acted as joint book runners.