AEON Credit Service (M) Bhd. · MYX:AEONCR
AEON Credit Service (M) Bhd — Shareholder Meeting (October 2023)
31 slides from AEON Credit Service (M) Bhd's shareholder meeting presentation, Oct 16, 2023
Slide 1: Proposed Joint Venture and Proposed Bonus Issue - Extraordinary General Meeting
AEON CREDIT SERVICE (M) BERHAD (I) Proposed Joint Venture; and (II) Proposed Bonus Issue Extraordinary General Meeting Presented By (Company No. 197501002220 (23742-V)) (A Participating Organization of Bursa Malaysia Securities Berhad) 16 October 2023
Slide 2: Proposed Joint Venture and Proposed Bonus Issue
PROPOSED JOINT VENTURE AND PROPOSED BONUS ISSUE Shareholders’ approvals are sought for the following:- Proposed Joint Venture 1 Proposed joint venture between AEON Credit Service (M) Berhad (“AEON Credit” or “Company”) and AEON Financial Service Co., Ltd. (“AFS”) to undertake the business of a digit
Slide 3: Rationale for the Proposed Joint Venture
RATIONALE FOR THE PROPOSED JOINT VENTURE A timely opportunity for AEON Credit to reach a wider pool of customers 1 through ACS Digital Berhad (“ACSD”) The Parties shall deploy their combined expertise in providing financial services 2 and solutions to customers, especially from the underserved and u
Slide 4: The Proposed Joint Venture: Initial Subscription
THE PROPOSED JOINT VENTURE Initial Subscription No. of ACSD Value of Shares contribution Remarks AEON 175m RM175m Expected to be subscribed by AFS AEON Credit Credit 4Q 2023 after obtaining BNM 50%* 50%* and shareholders’ approval AFS 175m RM175m Full amount already subscribed by AFS ACS Digital Tot
Slide 5: The Proposed Joint Venture (Cont'd): Equity Condition
THE PROPOSED JOINT VENTURE (CONT’D) Equity Condition • By 7 April 2029 (i.e. within 5 years from the commencement of business and operation of the digital Islamic bank which is scheduled to take place not later than 8 April 2024), at least 30% of the shares in ACSD to be held by Malaysian shareholde
Slide 6: The Proposed Joint Venture (Cont'd): Launch Timeline and Status
THE PROPOSED JOINT VENTURE (CONT’D) ▪ The market launch of ACSD’s banking business is expected to take place in the first quarter of 2024 (subject to the fulfilment of the conditions stipulated in the approval letter from Bank Negara Malaysia (“BNM”) and BNM’s satisfaction of the operational readine
Slide 7: The Proposed Joint Venture (Cont'd): Additional Financial Commitment
THE PROPOSED JOINT VENTURE (CONT’D) Undertaking from shareholders of ACSD for capital and liquidity support for 1 operationalization of the business plan. Additional 2 IfACSD Total Capital Ratio falls below the Internal capital Target, shareholders of to provide capital in an amount acceptable to BN
Slide 8: Effects of the Proposed Joint Venture
EFFECTS OF THE PROPOSED JOINT VENTURE Items Proposed Joint Venture Issued share capital and substantial ▪ No impact shareholdings Earnings and Earnings per Share ▪ ACSD will be an associated company of AEON Credit. Hence, (“EPS”) AEON Credit will share the results of ACSD based on its shareholdings
Slide 9: Rationale for the Proposed Bonus Issue
RATIONALE FOR THE PROPOSED BONUS ISSUE To reward existing shareholders of AEON Credit for their continued 1 support to the Company 2 Expected to enhance the marketability and trading liquidity of AEON Credit Shares on the Main Market of Bursa Securities 9
Slide 10: The Proposed Bonus Issue
THE PROPOSED BONUS ISSUE The salient terms of the Proposed Bonus Issue are as follows:- Terms Description Entitlement Basis ▪ 1 Bonus Share for every 1 existing AEON Credit Share Capitalisation of ▪ The Bonus Shares in respect of the Proposed Bonus Issue will be issued Reserves as fully paid, at no
Slide 11: Effects of the Proposed Bonus Issue
EFFECTS OF THE PROPOSED BONUS ISSUE Items Proposed Bonus Issue Issued share capital and substantial ▪ Increase number of shares in issue. However, no change shareholdings in the value of share capital ▪ No effect on the percentage shareholdings of the substantial shareholders as the Bonus Shares wil
Slide 12: Approvals Required
APPROVALS REQUIRED Approvals required for the Proposed Joint Venture and the Proposed Bonus Issue Completed Remaining approvals required 29 April 2022 31 July 2023 Mid-October 2023 16 October 2023 OBTAINED OBTAINED TO BE OBTAINED TO BE OBTAINED AT THIS EGM Approval of MOF for the Approval for the li
Slide 13: Directors' Statement and Recommendation
DIRECTORS’ STATEMENT AND RECOMMENDATION The Board (save for the Interested Directors) The Board is of the opinion that the is of the opinion that the Proposed Joint Proposed Bonus Issue IS IN THE BEST Venture IS IN THE BEST INTEREST of INTEREST of AEON Credit AEON Credit Accordingly, the Board (save
Slide 14: Independent Advice in Relation to the Proposed Joint Venture
AEON CREDIT SERVICE (M) BERHAD INDEPENDENT ADVICE IN RELATION TO THE PROPOSED JOINT VENTURE Presentation to the Non-Interested Shareholders of AEON Credit Service (M) Berhad 16 October 2023 Strictly Private & Confidential
Slide 15: Introduction of the Proposed Joint Venture
INTRODUCTION OF THE PROPOSED JOINT VENTURE ▪ Entails a joint venture between AEON Credit Service (M) Berhad (“AEON Credit”) and AEON Financial Service Co., Ltd. (“AFS”) (collectively, “Parties” or individually “Party”) to engage in digital Islamic banking business PROPOSED JOINT pursuant to the digi
Slide 16: Evaluation of the Proposed Joint Venture
EVALUATION OF THE PROPOSED JOINT VENTURE Rationale and benefits of the Proposed Joint Venture ▪ Expand the scope of offerings by including digital Islamic banking services. Expansion of the Group’s ▪ Further enhance the Group’s earnings from the consumer financing business. scope of offerings ▪ Allo
Slide 17: Evaluation: Basis and Justification of the Subscription Price
EVALUATION OF THE PROPOSED JOINT VENTURE (Cont’d) Basis and justification of the subscription price Basis and justification Subscription price Total investment outlay Additional capital requirement RM175.00 million RM275.00 million ▪ Proposed share capital of ACSD shall ▪ Eventual share capital of A
Slide 18: Evaluation: Other Considerations
EVALUATION OF THE PROPOSED JOINT VENTURE (Cont’d) Other considerations ▪ The terms contained in the Shareholders’ Agreement are reasonable and are common aspects of Salient terms of the any transactions/arrangements and are not detrimental to the interests of the non-interested Shareholders’ Agreeme
Slide 19: Evaluation: Financial Effects
EVALUATION OF THE PROPOSED JOINT VENTURE (Cont’d) Financial effects The pro forma effects of the Proposed Joint Venture based on the audited consolidated financial statements as at 28 February 2023 are as follows: Issued share capital and substantial shareholders’ shareholdings No effect as it does
Slide 20: Conclusion and Recommendation
CONCLUSION AND RECOMMENDATION After taking into consideration our evaluation of the following: ▪ Rationale and benefits ▪ Basis and justification of the subscription price ▪ Salient terms of the Shareholders’ Agreement ▪ Risk factors ▪ Industry overview and prospects of ACSD ▪ Financial effects Conc
Slide 21: Thank You
THANK YOU Strictly Private & Confidential
Slide 22: Presentation to Shareholders by Chief Financial Officer
Presentation to Shareholders by Chief Financial Officer
Slide 23: Business Overview
BUSINESS OVERVIEW More than 5.4 million members; Receiving 2 mil+ applications yearly Easy Payment Settlement Insurance Broker Credit Card, AMP & AEON Insurance Vehicle Financing Personal Financing ObjectiveFinancing Objective Financing AEON Wallet Brokers 212k Credit Card members 2.5 mil AMP Card m
Slide 24: Customer Journey
CUSTOMER JOURNEY Improve customer stickiness by serving more comprehensive products/ services via Digital Bank Credit Card Objective Financing Vehicle Financing Personal Financing Based on existing customer profile, ACSM is capturing customers between the age 21 to 35 years old across all products H
Slide 25: Joint Venture Opportunities
JOINT VENTURE OPPORTUNITIES AEON Credit X Digital Bank 1. Activating AEON Living Zone 2. Expanding Customer Lifetime Value (CLTV) 3. Enhancing Resources & Technology 4. Increasing Competitive Edge Page 25
Slide 26: Activating AEON Living Zone
ACTIVATING AEON LIVING ZONE Membership expansion via cross selling within the AEON Ecosystem ❑ AEON Group of companies’ loyalty customers ❑ AEON merchants and business partners ❑ Tenants and suppliers ❑ AEON Group employees ❑ Millennials, Gen Z and Gen Y and digital-savvy Gen X AEON Credit: • Financ
Slide 27: Expanding Customer Lifetime Value (CLTV)
EXPANDING CUSTOMER LIFETIME VALUE (CLTV) Comprehensive financial solutions to our customers and business partners Financial App ❑ Personalization and Customer • CASA Engagement • Hire Purchase • Micro Loans & • Personal Loans MSME Loans ❑ Quality Customer Experience • DuitNow • Objective ❑ Cross-Sel
Slide 28: Enhancing Resources & Technology
ENHANCING RESOURCES & TECHNOLOGY Deployment of combined expertise and new technology ❑ Talent Diversity ❑ Embracing New Technology ❑ Cybersecurity and Cyber cy Resilience ❑ Partnership and Alliances ❑ Increase Revenue Stream Page 28
Slide 29: Increasing Competitive Edge
INCREASING COMPETITIVE EDGE Digital transformation to elevate customer experience ❑ Enhancing Customer Experience Online ❑ Innovative Products and Services ❑ Cost Efficiency RETAIL ❑ Data-Driven Insights X FINANCE ❑ One-Stop Center Stores Mobiles Page 29
Slide 30: Proposed Bonus Issue
PROPOSED BONUS ISSUE 1 Bonus Share for every 1 existing AEON Credit Share Proposed Bonus Issue Rationale 1 + 1 2 Existing AEON Proposed Bonus AEON Credit Shares ❖ To improve the marketability Credit Share Share (Upon Completion) and trading liquidity of the Company’s shares ❖ To reward our sharehold
Slide 31: Thank You
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AEON Credit Service (M) Berhad — Shareholder Meeting (October 2023) on 6ix