(AFP) National car distributor Edaran Otomobil Nasional (EON) said it will list its unit EON Bank through a reverse takeover of shell company Kedah Cement Holdings (KCHB).

Under the proposal, which values EON Bank at RM2 billion, KCHB will acquire a combined 84.77 percent stake in EON Bank to be paid for through a combination of cash and new KCHB shares to be issued RM2.58 ringgit each.

EON will in turn acquire a 77 percent stake in KCHB from Malayan Cement Bhd at RM2.67 a share plus a premium of RM36 million for KCHB's listing status.

EON and other investors in EON Bank -- RH Development Corp and Ceria Alam -- will offer RM2.67 each for the remaining KCHB shares it does not own, an EON statement said.

Saleh Sulong, the chairman of DRB-Hicom Bhd, which owns nearly 32 percent of EON, said the reverse takeover was not a prelude to DRB-Hicom selling its stake in EON.

"(Taking EON Bank out of EON) is not a prelude to DRB-Hicom selling its stake in EON," Saleh was quoted as saying by AFX-Asia , an AFP -owned financial news wire.

Tim Jennison, a corporate finance director at ING Barings, which is advising on the deal, said he expected EON Bank to be injected into Kedah Cement at an indicative value of about RM2 billion.

Unlock value

Saleh said the backdoor listing of EON Bank would unlock shareholder value and enable EON Bank to gain access to public funds.

EON Bank opted to list via a reverse takeover instead of undertaking an initial public offering, as "the valuation of EON Bank is more favourable through the reverse takeover", he said.

Saleh said EON expects to retain the banking unit as a subsidiary.

"EON will remain consolidating EON Bank's (earnings) going forward," he said.

Trading in the shares of Edaran Otomobil, Malayan Cement and Kedah Cement have been suspended since Thursday but the suspension is expected to be lifted tomorrow.