September 2, 2013 / 7:11 AM / 4 years ago

Malaysia's rejects BIMB's sukuk proposal for Bank Islam

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KUALA LUMPUR, Sep 2(Reuters) - Malaysia's central bank has rejected plans by BIMB Holdings Bhd to issue an Islamic bond and raise $884 million it needs to gain full control of Bank Islam, the country's oldest and largest standalone Islamic bank.

BIMB last month proposed a 10-year Islamic bond or sukuk of of 1.5 billion ringgit ($456.66 million) as part of a plan to acquire the 49 percent stake it does not own in Bank Islam held by Dubai Group and Tabung Haji.

Malaysia's central bank has rejected BIMB's proposal to secure the sukuk with shares of the company, which will need to identify an alternative asset for the exercise, BIMB said in an announcement to the stock exchange on Monday.

"We shall convene a special board meeting and further announcements will be made in due course," BIMB's chief executive officer Johan Abdullah told Reuters. (Reporting by Al-Zaquan Amer Hamzah; Editing by Niluksi Koswanage)

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