Published on 07 May 2015
RAM Ratings is of the view that Tune Ins
Holdings Berhad’s (TIH or the Group) recently announced proposal to
acquire a 50%-plus-one-share of Indonesian insurer PT Asuransi Staco
Mandiri (ASM) will not materially impact its A1/Stable/P1 ratings. We
understand that the proposed acquisition, estimated to cost about RM22.8
million, will be funded internally by TIH’s earlier IPO proceeds,
already earmarked for this purpose. TIH is currently debt-free, with
cash and deposits of over RM400 million as at end-2014.
The acquisition of ASM, if approved by regulators,
would be a positive to TIH’s performance as it would facilitate direct
underwriting of travel insurance in Indonesia, which currently accounts
for about 8% of TIH’s gross written premiums from travel insurance.
Presently, travel insurance in Indonesia is underwritten by TIH’s local
insurance partner.
Listed on the Main Market of Bursa Malaysia since
February 2013, TIH is an insurance holding company with core businesses
in travel insurance and conventional general insurance. The travel
insurance business currently serves AirAsia, Tune Hotels, AirAsia
Expedia, Cebu Pacific and Air Arabia.
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