Telekom Malaysia to Sell Off Mobile Operations
As reported here yesterday, Telekom Malaysia has confirmed plans to split the company's mobile and fixed line businesses into two distinct entities. The company says that the underlying objective of the proposed demerger is to "accelerate operational improvements and growth through clearer strategic and organisational focus and further unlock shareholder value".
Click to enlarge
Powerpoint slide showing map of RegionCo operations
Powerpoint slide showing country prospects
The demerger exercise will result in the creation of two companies - RegionCo, which will include TM's regional mobile operations under TM International, and domestic mobile operations under Celcom. It is intended for the RegionCo to be demerged from TM Group and be separately listed.
The second company is FixedCo, which will retain the listed TM's domestic interests in fixed-line voice, data and broadband, and other non-telecommunications related services under TM Ventures.
During a media briefing held at the Group's corporate headquarters, TM's Chairman Tan Sri Dato' Ir. Md. Radzi Mansor said, "This is an exciting milestone in TM's history. The demerger will continue the success of TM by creating two listed telcos, both of which could potentially enjoy a status amongst the largest companies by market capitalisation on Bursa Malaysia. RegionCo will emerge as a regional mobile champion expanding beyond 10 countries and increasing its foot-print in Asia, while FixedCo will focus on growing the domestic broadband market."
The group says that RegionCo, as a separate regional mobile champion will benefit from increased deal structuring capability with its enhanced profile as a successful and growing pure-play mobile operator. The separate listing also provides RegionCo with a more attractive acquisition currency, in the form of its own listed shares, and greater access to equity markets and increased flexibility in funding. These allow RegionCo to be better positioned to pursue its growth strategies.
According to Dato' Abdul Wahid, "The final terms of the demerger exercise will be announced in the last quarter of 2007. Thereafter, the Company will seek necessary approvals from the regulators and shareholders. We expect the exercise to be completed end of second quarter 2008."
Posted to the site on 28th September 2007
