Macquarie Bank, Australia's top investment bank, said on Monday it would go ahead with restructuring plans and had secured A$8 billion (US$6.4 billion) in new funding to help grow its non-banking businesses.
Macquarie confirmed it would establish a new non-bank holding company as part of the restructure, and would hold an extraordinary general meeting of shareholders on Oct. 25 to consider the proposal.
The bank said it had secured commitments for the A$8 billion term bank facility from a syndicate of major international and Australian banks. The facilities would have maturities ranging from one to five years.
The funds would be used by the new non-holding company, to be known as Macquarie Group, for the acquisition of investment banking businesses and some other non-banking activities from Macquarie Bank.
"The non-holding company structure would provide Macquarie with the flexibility to continue to pursue growth in the regions and markets in which we operate," Macquarie Bank Chairman David Clarke said in a statement.
Under the scheme of arrangement, shareholders would exchange their Macquarie Bank shares for shares in Macquarie Group which will be listed on the Australian stock exchange.
Macquarie Group would be regulated by the Australian banking regulator, while Macquarie Bank would become a wholly-owned subsidiary of Macquarie Group and remain a licensed Australian bank.
The setting up a non-holding company structure would allow Macquarie Bank to sustain its fast growing non-banking businesses while retaining the benefit of operating banking businesses through a licensed bank.
Growth in Macquarie's fast-growing international businesses, especially its infrastructure funds management business, is constrained by capital requirements under the current structure, which has prompted the move.
Allan Moss, currently Managing Director and Chief Executive Officer of Macquarie Bank, would become Managing Director and CEO of Macquarie Group, while Richard Sheppard, who is Deputy Managing Director of Macquarie Bank, would be appointed Managing Director and CEO of the banking arm.
"The creation of the non-holding company will facilitate Macquarie's continued international expansion in our investment banking, stockbroking, specialist funds management, trading, and other activities," Moss said in a statement.