great eastern
Great Eastern Logo.

Life insurance company Great Eastern Holdings is mulling to divest its stake in Malaysia operations for US$1 billion, the Wall Street Journal reported on Tuesday.

The Singapore-listed firm, which is backed by OCBC Bank, has already engaged a Malaysian bank to discuss the potential deal, the WSJ reported citing people familiar with the matter.

Options include strategic stake sales, or initial public offerings (IPO) in the country.

Other foreign insurers reportedly in talks to sell their stakes in their respective Malaysian units ahead of a Bank Negara deadline requiring a 30 percent local ownership include Britain's Prudential Plc and Japan's Tokio Marine Holdings.

Prudential has not reached a decision on how to structure its share sale while Tokio Marine is exploring options for compliance with the new mandate, the WSJ report said.

Last June, the Malaysian central bank gave insurers until June 2018 to meet its requirement that foreign ownership should not exceed 70 percent. The move was aimed at increasing local participation in the industry.

Shares in Great Eastern Holdings gained 1.1 percent to S$25.89 on the Singapore Exchange. The stock has risen about 27 percent so far this year.