TM plans to sell Axiata shares for RM879m

Friday December 3, 2010




PETALING JAYA: Telekom Malaysia Bhd (TM) has proposed to dispose of 191.46 million shares, or 2.27%, in Axiata Group Bhd for RM879.4mil.



In a filing with Bursa Malaysia yesterday, TM said the shares were held by its wholly-owned subsidiary TM ESOS Management Sdn Bhd.



TM ESOS was the trustee for TM's previous employee share option scheme (Esos), under which options for ordinary shares in TM and Axiata were granted to eligible employees of the TM group of companies.



The sale shares are the remaining Axiata shares held by TM ESOS not offered to employees or for which options were unexercised and consequentially lapsed under the Esos, TM said.



The Esos expired on Sept 16.



TM said the proposed disposal was to be satisfied entirely by cash and undertaken through private placement(s) via a bookbuilding process to eligible third-party institutional/sophisticated investors and/or open market disposal(s).



Assuming that all 191.458 million sale shares are disposed of at a sale price of RM4.593 per share (being the five-day volume-weighted average market price for Axiata shares up to and including Dec 1), the proceeds raised from the proposed disposal will be about RM879.4mil, it said.



TM said it would use the proceeds raised for working capital, capital expenditure, investments and/or acquisitions, including the repayment of borrowings.



It added that its cost of investment for the Axiata stake was about RM434.7mil, or RM2.27 per share.



As the cost of investment in the sale shares is lower than the prevailing market price of Axiata shares, the proposed disposal would also enable the TM group to crystallise any gain accruing thereon, TM said.


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