Telekom Malaysia shareholders approve demerger; unit to be listed in Q2 (Malaysia)State-controlled Telekom Malaysia Bhd ™ said on Thursday shareholders have approved its proposed demerger, and plans to float its mobile and overseas operations by June remain on track.
Malaysia’s largest telecommunications company is planning to spin off its mobile and non-Malaysian businesses, housed under TM International Bhd (TMI). TMI will then be listed as a separate entity on the main board of the Malaysian bourse.
Telekom Malaysia’s fixed-line voice, data and broadband operations will be housed under TM, the existing listed company.
Under the demerger proposal, TM shareholders will receive one TMI share for every single TM share held.
‘We believe that this will result in significant operational and strategic benefits to both TM and TMI moving forward. Their approval is an endorsement of the group’s transformation efforts,’ said TM chairman Mohammad Radzi Mansor.
Abdul Wahid Omar, chief executive officer of TM, said TMI is on track to be listed in the second quarter.
‘We still have a few other approvals to be obtained, we hope we will be able to get all these remaining approvals in the next two months,’ said Wahid.
The TM chief said the demerger is expected to be completed next month when the company holds its annual shareholder meeting, and the listing of TMI will happen thereafter.
‘We have been given the time guidance by the end of the second quarter, so indeed, the listing should happen before June,’ he said.
Wahid said the company has yet to decide whether or not to bring in a foreign partner at TMI. The company previously said it may sell a portion of its stake in TMI to a foreign entity.
‘We are still evaluating, there is no specific proposal to be evaluated per se. The first step will be to determine whether we really need a partner,’ he said.
Earlier media reports said TM has shortlisted at least three foreign parties for the proposed sale of the TMI stake and France’s Vivendi SA and China Mobile Ltd were quoted as among the interested telcos.
TM has a 95 percent market share in the Malaysian fixed-line industry and controls 96 percent of the broadband business. It also owns significant mobile assets in Sri Lanka, India, Indonesia, Singapore and Bangladesh.
The company, controlled by government investment arm Khazanah Nasional Bhd, is the contractor for the 15.2 billion ringgit project to develop Malaysia’s nationwide high-speed broadband infrastructure.
At 4.06 pm, TM shares were up 10 sen or 0.9 percent at 11.10 ringgit. TM’s share price has dropped 0.9 percent so far this year, against the benchmark composite index’s 7.7 percent fall.
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