Telekom Malaysia Sells Guinea Investment for Just $1
Published on: 11th Aug 2008
Note -- this news article is more than a year old.
Telekom Malaysia has sold its entire stake in Guinea based Sotelgui to the Guinea government for a token US$1. Telekom Malaysia held 60% of Sotelgui, while the government owned the remaining 40%. Now that the government has taken sole ownership, it is expected to seek a different partner to invest in the firm.
TM's investment in Guinea commenced on 23 December 1995 with the signing of a Joint Venture Agreement with the Government of Republic of Guinea. The joint venture was for the 60% stake in Sotelgui which TM currently holds, with the remaining 40% being held by the government. TM initial investment was for US$45 million.
In 2005, TM announced that it had initiated exit plans from Guinea, as part of a broader review of its international investment strategy to focus on geographic regions closer to home. At the time, the company wrote down the value of its stake in Sotelgui to just US$1.
The government is also paying USD2.04 million to TM in settlement of outstanding debts.
TM will realize approximately RM82 million (USD24.7 million) foreign exchange loss from the sale, but says that this has no impact to the company cash flow.
According to figures from the Mobile
World, Sotelgui ended Q1 '08 with around 570,000 subscribers - and a
market share of 31%.