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    Great Eastern Considers Minority-Stake Sale to Malaysian Pension Fund

    Great Eastern Holdings is considering a minority stake sale of its Malaysian unit to Employees Provident Fund (EPF).

    Bankbazaar Singapore - February 6, 2018

    Singapore: In an attempt to meet Malaysian central bank’s recent directive requiring foreign insurers to operate with partial local ownership in the country, Great Eastern Holdings is considering a minority stake sale of its Malaysian unit to Employees Provident Fund (EPF), reports the Wall Street Journal.

    The deal is expected to be worth as much as MYR3.88 billion ($1 billion) and, if successful, could give the pension fund access to the lucrative local insurance market. Great Eastern was one of the first insurers to begin operations in Malaysia and currently has more than three million active policies.

    Malaysia’s central bank has mandated that foreign ownership in local insurance providers should be limited to 70% by June this year. Last year Great Eastern had revealed it was considering options to sell a minority stake in its Malaysian business.

    If talks with EPF are not successful and Great Eastern is not able to find another buyer, the insurer might even look to go for an Initial Public Offering (IPO).

    The Singapore insurer is not the only foreign insurance company operating in Malaysia without local ownership. Firms like the Japan-based Tokio Marine Holdings and the UK-based Prudential will also be under pressure to comply with the new regulation. 

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