Is this it for Time dotCom?

Saturday November 20, 2010



Sideways by ANITA GABRIEL





IF there's one thing you can't say about the chest of deals Time dotCom (TdC) opened over the week, it would be that none of us saw it coming on hindsight, that is.



When Khazanah Nasional Bhd embarked on a no-doubt arduous search for a chief steward for the long boss-less and rudderless TdC, it finally found one in Afzal Abdul Rahim just over two years back.



It came with a two-in-one deal Afzal and his controlled Global Transit International Sdn Bhd (GTI), which owns a company that provides internet protocol (IP) transit services and international bandwidth capacity.



Also, it was a two-way deal. Afzal grabbed the offer as he finally found a company which GTI could ride on as prior to that, the company did not have its own infrastructure, hence was far too reliant on other players.



Today, the IP company as well as two other assets a company that owns 10% of an international submarine cable and a regional data centre operator are all being injected into TdC for a tidy sum of RM339mil.



Following Afzal's appointment to TdC, Khazanah's stake in TdC was transferred to a special purpose vehicle (SPV) controlled by Khazanah. If Afzal met his performance targets to turn around the company in three years, he could raise his stake in the SPV and in turn, become its major shareholder. Indeed, an incentive worth fighting for.



Only, the pat on the back appears to have come a tad earlier than the three-year target (our cover story this week delves into this issue).



When Khazanah launched its ambitious Government-linked Company Transformation Programme back in 2004, the need to resuscitate bigger companies namely Malaysia Airlines System Bhd and Proton Holdings Bhd was on top of its priority list.



Inadvertently, TdC had slipped off to the backstage of the massive GLC reform process.



No amount of voluminous literature and painfully-crafted rainbow-coloured-themed books by Khazanah (remember, the Yellow, Red, Green, Purple, Orange and Silver Books?) spelling out detailed initiatives to catalyse this transformation could help TdC.



Afzal provided the outlet for Khazanah to somewhat relinquish its hold on driving the operations forward. Simply put, the headache was not as much Khazanah's as it was Afzal's. And the proposed acquisitions announced this week was another major step in this direction. Upon completion of the exercise, Afzal would end up with a larger stake in the group.



There are mutterings that the valuation of these assets may be a tad high and the deal has drawn some scepticism as they are related party transactions, not in itself a bad thing but usually, enough to bring out the red flags.



Could this finally be it for TdC to regain its long-lost lustre? Hard to tell. But without a doubt, it may be what Afzal had waited for since he took over the helm of the company.



Punch line if you're having problems trying to lift a flagging asset, bring in a fresh, new CEO with sound assets with seemingly sound potential to inject into a company and in turn, allow him to gain control.



Little wrong with that. In fact, it's one way to nurture entrepreneurial talent in a country screaming for more. Except for this if the plan flops, it'll be hard to forgive and forget.



>Business editor Anita Gabriel is intrigued by KFC Holdings and its related companies' vague announcement of a takeover offer. Details, where art thou?


http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7440204&sec=business