Monday, November 29, 2010
TM profit surges on operating revenue and disposal gains
Saturday November 27, 2010
KUALA LUMPUR: Telekom Malaysia Bhd's (TM) net profit for its third quarter surged 145% to RM438.49mil from RM179.07mil before mainly due to higher operating revenue and higher gain on disposal of investments.
Revenue for the quarter ended Sept 30 increased to RM2.19bil from RM2.10bil a year earlier mainly on higher revenue from data and other telecommunications-related services, which mitigated the impact of lower revenue from voice and non-telecoms services, TM told Bursa Malaysia yesterday.
Data revenue increased by 24.6% in the third quarter to RM440.9mil compared with RM353.9mil in the same quarter 2009 arising from demand for higher bandwidth services.
Other telecommunications-related services revenue increased by 34.2% in the third quarter to RM320.7mil compared with RM238.9mil in 2009 mainly due to higher revenue from customers' projects such as MERS 999 and income from HSBB (high-speed broadband) grant, it said.
Revenue from Internet and multimedia rose 1.4% to RM411.1mil arising from the increase in broadband customers to 1.6 million during the quarter from 1.4 million in the corresponding period of 2009, TM said.
For the nine months ended Sept 30, TM's net profit surged to RM805.82mil from RM472.78mil a year earlier while revenue increased to RM6.47bil from RM6.34bil.
On prospects going forward, the company said the broadband market was set to grow further as the country moved rapidly toward Internet-based activities and transactions.
Broadband service is now gradually being seen as a necessity for the average Malaysian and this was evident in the strong take-up rate for TM's broadband services recorded over the previous quarters, it said.
According to TM, the number of UniFi users has exceeded 21,000 while premises breached the 700,000 level as at Nov 15.
UniFi has also been expanded to cover a total of 26 exchange areas with seven of those located in industrial zones in Johor, Penang, Kedah and Selangor.
By end-2010, TM is expected to meet the target of 48 exchange areas being served by UniFi with 750,000 premises passed, it said.
TM said it expected the business environment for the year ending Dec 31 to remain challenging.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/27/business/7511399&sec=business
KUALA LUMPUR: Telekom Malaysia Bhd's (TM) net profit for its third quarter surged 145% to RM438.49mil from RM179.07mil before mainly due to higher operating revenue and higher gain on disposal of investments.
Revenue for the quarter ended Sept 30 increased to RM2.19bil from RM2.10bil a year earlier mainly on higher revenue from data and other telecommunications-related services, which mitigated the impact of lower revenue from voice and non-telecoms services, TM told Bursa Malaysia yesterday.
Data revenue increased by 24.6% in the third quarter to RM440.9mil compared with RM353.9mil in the same quarter 2009 arising from demand for higher bandwidth services.
Other telecommunications-related services revenue increased by 34.2% in the third quarter to RM320.7mil compared with RM238.9mil in 2009 mainly due to higher revenue from customers' projects such as MERS 999 and income from HSBB (high-speed broadband) grant, it said.
Revenue from Internet and multimedia rose 1.4% to RM411.1mil arising from the increase in broadband customers to 1.6 million during the quarter from 1.4 million in the corresponding period of 2009, TM said.
For the nine months ended Sept 30, TM's net profit surged to RM805.82mil from RM472.78mil a year earlier while revenue increased to RM6.47bil from RM6.34bil.
On prospects going forward, the company said the broadband market was set to grow further as the country moved rapidly toward Internet-based activities and transactions.
Broadband service is now gradually being seen as a necessity for the average Malaysian and this was evident in the strong take-up rate for TM's broadband services recorded over the previous quarters, it said.
According to TM, the number of UniFi users has exceeded 21,000 while premises breached the 700,000 level as at Nov 15.
UniFi has also been expanded to cover a total of 26 exchange areas with seven of those located in industrial zones in Johor, Penang, Kedah and Selangor.
By end-2010, TM is expected to meet the target of 48 exchange areas being served by UniFi with 750,000 premises passed, it said.
TM said it expected the business environment for the year ending Dec 31 to remain challenging.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/27/business/7511399&sec=business
Sunday, November 28, 2010
Implementation of New Public Cellular Phone Numbering With 3 Plus 8
The Malaysian Communications and Multimedia Commission (MCMC) has announced on the 1st October 2010 that a new mobile prefix “011” has been opened to be shared by the mobile telephone operators. This prefix is the first three numbers followed by the eight-digit telephone number and also known as 3 + 8 Public Cellular Phone Numbering. The decision to open a new shared prefix “011” is one of the measures to accommodate the public cellular service providers’ additional requirement for numbers. Through another announcement made by MCMC on the 2nd November 2010,a briefing was held at MCMC Headquarters which was attended by industry members,regulatory bodies, the media, consumer forums and interested parties.The briefing sought to enhance participants understanding of the new public cellular numbering system.
The new public cellular phone numbering will take off with the prefix-011 followed by eight digit numbers (011 1XXX XXXX), set to be launched on 15 December 2010. This is one of the long-term planning measures undertaken by MCMC after taking into consideration that the existing public cellular phone numbering format of 3 + 7 is running out and will not be able to support and accommodate the demands from the industry in the near future. However, these additional allocations will not a replacement to the existing prefixes for public cellular numbers that are currently in use, such as 010, 012, 013, 014, 016, 017, 018 and 019. The accompanying seven digit subscriber numbers used with these prefixes will continue to be used.
This new implementation is also a result of the increase in the number of cellular service providers and the potential of various service applications which will be made available due to the advancement of communication technologies.
The prefix 011 is intended to be shared by all the existing service providers to provide additional new mobile numbers to be shared by the operators under one common dialing prefix.
Sources : http://www.skmm.gov.my/
The new public cellular phone numbering will take off with the prefix-011 followed by eight digit numbers (011 1XXX XXXX), set to be launched on 15 December 2010. This is one of the long-term planning measures undertaken by MCMC after taking into consideration that the existing public cellular phone numbering format of 3 + 7 is running out and will not be able to support and accommodate the demands from the industry in the near future. However, these additional allocations will not a replacement to the existing prefixes for public cellular numbers that are currently in use, such as 010, 012, 013, 014, 016, 017, 018 and 019. The accompanying seven digit subscriber numbers used with these prefixes will continue to be used.
This new implementation is also a result of the increase in the number of cellular service providers and the potential of various service applications which will be made available due to the advancement of communication technologies.
The prefix 011 is intended to be shared by all the existing service providers to provide additional new mobile numbers to be shared by the operators under one common dialing prefix.
Sources : http://www.skmm.gov.my/
Wednesday, November 24, 2010
Saturday, November 20, 2010
YTL Comms extending coverage
Saturday November 20, 2010
Its Yes service will cover 80% of population by end-2011 from 65% now
KUALA LUMPUR: YTL Communications Sdn Bhd (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011.
YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bil in the Yes 4G infrastructure.
We will extend to Sabah and Sarawak at the right time, executive director Datuk Yeoh Seok Hong told a briefing prior to the service launch by Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday.
Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country.
We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said.
Chief executive officer Wing K. Lee said Yes was the most affordable 4G mobile Internet-with-voice service in Malaysia.
He said its pay-as-you-go rate of nine sen for 3MB (megabit) data, one-minute call or one short-messaging service was the cheapest in town.
Lee said Yes also offered up to 30% rebate to power users who consume high amounts of data.
The saving starts at 2.5GB (gigabit). The more you use, the less you pay, he said, adding that for usage of 4GB and above, subscribers would get a 30% rebate for every GB used.
Yes subscribers will receive a rebate of RM9 for data usage of 2.5GB while usage of 3GB will get RM23 rebate.
The rebates will reduce Yes' rates to as low as two sen per MB or RM20 per GB while giving users the power to self-manage by setting temporary data caps.
YTL Comms and Samsung have also introduced the world's first all-4G mobile phone, Yes Buzz, which will be available next month.
The 4G network will be SIM-less with the 018 prefix.
YTL Comms chairman Tan Sri Francis Yeoh declined to give a specific target of pre-registered subscribers but said the numbers were healthy.
He said the response to the pre-registration had exceeded the group's expectations by three times.
Yeoh said the group was keen to cooperate with telecommunications service providers in China and other Asian countries to offer 4G services.
Prior to the launch, Yes 4G faced interconnectivity issues with other networks as it was unable to interconnect with the operators. However, the group managed to sign interconnectivity agreements with them yesterday.
We're now finally interconnected with everybody. We have received full cooperation (from other telcos), Seok Hong said, adding that other operators had welcomed them onboard.
At the launch, Muhyiddin spent five minutes on a video call with Malaysian students in London.
Also present were YTL Corp executive chairman Tan Sri Yeoh Tiong Lay; Information, Communications and Culture Minister Datuk Seri Utama Dr Rais Yatim; Tun Lim Kheng Yaik; and Datuk Seri Chua Soi Lek.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7468348&sec=business
Its Yes service will cover 80% of population by end-2011 from 65% now
KUALA LUMPUR: YTL Communications Sdn Bhd (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011.
YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bil in the Yes 4G infrastructure.
We will extend to Sabah and Sarawak at the right time, executive director Datuk Yeoh Seok Hong told a briefing prior to the service launch by Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday.
Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country.
We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said.
Chief executive officer Wing K. Lee said Yes was the most affordable 4G mobile Internet-with-voice service in Malaysia.
He said its pay-as-you-go rate of nine sen for 3MB (megabit) data, one-minute call or one short-messaging service was the cheapest in town.
Lee said Yes also offered up to 30% rebate to power users who consume high amounts of data.
The saving starts at 2.5GB (gigabit). The more you use, the less you pay, he said, adding that for usage of 4GB and above, subscribers would get a 30% rebate for every GB used.
Yes subscribers will receive a rebate of RM9 for data usage of 2.5GB while usage of 3GB will get RM23 rebate.
The rebates will reduce Yes' rates to as low as two sen per MB or RM20 per GB while giving users the power to self-manage by setting temporary data caps.
YTL Comms and Samsung have also introduced the world's first all-4G mobile phone, Yes Buzz, which will be available next month.
The 4G network will be SIM-less with the 018 prefix.
YTL Comms chairman Tan Sri Francis Yeoh declined to give a specific target of pre-registered subscribers but said the numbers were healthy.
He said the response to the pre-registration had exceeded the group's expectations by three times.
Yeoh said the group was keen to cooperate with telecommunications service providers in China and other Asian countries to offer 4G services.
Prior to the launch, Yes 4G faced interconnectivity issues with other networks as it was unable to interconnect with the operators. However, the group managed to sign interconnectivity agreements with them yesterday.
We're now finally interconnected with everybody. We have received full cooperation (from other telcos), Seok Hong said, adding that other operators had welcomed them onboard.
At the launch, Muhyiddin spent five minutes on a video call with Malaysian students in London.
Also present were YTL Corp executive chairman Tan Sri Yeoh Tiong Lay; Information, Communications and Culture Minister Datuk Seri Utama Dr Rais Yatim; Tun Lim Kheng Yaik; and Datuk Seri Chua Soi Lek.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7468348&sec=business
Injecting life into Time dotCom
Saturday November 20, 2010
By RISEN JAYASEELAN
risen@thestar.com.my
IN October 2008, then 30-year-old Afzal Abdul Rahim (pic) emerged as a new shareholder and chief executive of the ailing Time dotCom Bhd (TdC). Afzal's entry into TdC was via his vehicle called Global Transit International Sdn Bhd (GTI) and the deal was structured this way: Khazanah Nasional Bhd would transfer 30% of its holdings in TdC into a special purpose vehicle (SPV) called Pulau Kapas Ventures Sdn Bhd (PKV) resulting in Khazanah getting 61.2% of PKV. GTI, in turn, injected its wholly-owned subsidiary Global Transit Communications Sdn Bhd (GTC) into the SPV, with GTI then being given the balance 38.8% of the PKV.
Now two years later, after having met milestones at TdC the company has shown five consecutive quarters of earnings and revenue growth he is set to gain control over TdC by injecting his prized assets into the company. Confident and chatty, Afzal, a mechanical engineering graduate from the University of Sussex, breezes through questions effortlessly, especially the tough ones about whether he is cashing out or injecting his assets at too high a price.
Excerpts:
Q: What is your reaction to the sell down of TdC shares a day after the deal was announced?
A: The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. However, to give perspective, many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base.
One view is that the capital reduction was ill-timed, in the sense that it should not have been coupled with a deal that was primarily aimed at enhancing shareholder value. What are your comments?
The capital reduction and consolidation is necessary to enhance shareholders value moving forward. For TdC to leapfrog in its end to end service and business offerings, it needs to acquire these assets. Furthermore, we wanted to acquire using TdC shares as currency in order to commit the vendors of the assets to TdC. TdC can't issue shares as its share price is below the par value of RM1. So there is really no way out but to do capital reduction and consolidation of shares for the eventual benefit of TdC.
Why such a small capital repayment? Why not sell more DiGi.Com Bhd shares and give a higher capital repayment?
We believe in this business and that we can generate earnings moving forward. But we have then to decide if we are a profit and dividend yielding company or a growth company. We've managed to turn the company around and profitability is growing. The dividends from DiGi.Com shares are now a core part of our earnings. If we sell DiGi.Com shares and return that money to shareholders, then we are denying our shareholders future earnings. Selling the DiGi.Com shares also indicates that we lack long-term confidence in our business.
So what are the long-term plans with the DiGi.Com shares?
We will do what's best for our shareholders. We're very happy with DiGi.Com's performance as a company. If we did decide to sell the DiGi.Com shares, we would have to think whether to return the money to shareholders or to invest it in our business. But right now we have a lot of confidence in our business. DiGi gives us a certain return from the dividends. If we were to invest it, we must ensure that we can get at least the same amount, if not more than those returns.
One contention of this deal is that some of the assets that you are injecting into TdC are being valued at very high prices. For example RM105mil for GTL, which is a loss-making company.
The valuations were jointly decided by TdC's advisors together with an independent financial advisor, Public Investment Bank, which was appointed by the two independent directors of TdC Ronnie Kok Lai Huat and Balasingham Namasiwayam. In addition, TdC's chairman Abdul Kadir Kassim is a firm believer in governance and due process. What this valuation shows is that there is upside if the acquisitions go through.
As an example, GTL owns 10% of the Unity cable system that was built at a cost of US$300mil and whose replacement cost is many times that. Furthermore, the biggest barrier to entry for submarine cables isn't just cost but to actually be invited to participate in the cable. Then there is the matter of putting a value on the capacity of the cable based on market prices for bandwidth. The Unity submarine cable was just completed in April 2010 and the company was only operational in April. The past two years' results reflect the phase of cable construction. The book value reflects only the historical construction cost of the asset while the value of the asset today lies in its market price of the cable bandwidth capacity and earnings potential. At a capacity of 480 Gbps being GTL's portion of the Unity cable, monthly wholesale lease prices currently at US$59,000 per 10 Gbps and an asset life of more than 10 years, GTL is a strategic asset that will provide the TdC with cost advantages and access to the regional wholesale market.
But is there going to be an over-capacity of submarine cables?
Not across the Trans-Pacific, I don't think so.
Can you and TdC actually monetise the submarine cable?
Unity was commissioned only in May and GTC has already sold 10% capacity of the initial 48Gbps.
Can you give us some colour on PKV and how you are increasing your stake there from 38.8% to 51%?
I have been working 18-hour days since 2000 to build these companies which are like my children. If I am going to inject these companies into TdC, I will want to have some control over them. I also have to put my money where my mouth is, and inject all my businesses into TdC at a valuation that is ascribed by the independent financial advisors. I am also activating a call option to pay Khazanah for more TdC shares. These companies are earning year-to-date around RM13mil. I am giving that away.
But these companies don't seem to have a long enough profit track record?
AIMs has been around since 1990. It has been profitable since 2000. The losses that you see were because we had gone into the Singapore market to build a data centre and had to pull out during the bad economic times in 2007, so there was an investment loss. Profits from operations have always been positive in AIMs.
What about this earn out structure that Khazanah has with you? When will your shareholding in PKV increase in accordance with this agreement?
The agreement between Khazanah and us is so onerous that we will only get our earn-out at the end of the three-year period, meaning end of next year. So even though we have exceeded our targets, the earn-out structure (whereby we will get more PKV shares due to our performance) will only kick in end-2011. We are now paying for more PKV shares via a call option.
So why didn't you wait until 2011 to get control over PKV and thereby the 30.04% block of TdC?
By then, it may be more expensive for TdC to buy these companies. For example, GTC's growth rates are stunning. These companies are growing at a higher rate than TdC. The longer we wait to do the deal, the more expensive it is going to get for TdC to buy these companies. There are also certain operational and business synergies that need to kick in now, for the whole group of companies to be competitive.
How would you describe the new TdC, post acquisitions?
This will allow TdC to entrench itself as a leading regional wholesale player with a specific emphasis on high availability data services addressing a much wider part of the value chain than we have ever offered before.
What did you actually do to extract more value out of TdC's fibre-optic network since becoming the companies' CEO?
Fibre is our key asset and will always remain that. All we did was to understand market demands and requirements and match that to where our infrastructure was present. We also simplified our technology and engineering aspects of our network and significantly increased utilisation across our nationwide fibre presence. So long as there continues to be a strong relationship between customer demand and the manner of which we deploy our network, we will continue to extract value from our fibre asset base. A prime example of this is how we managed to use the same cause of fibre to serve our mobile backhaul customers, high capacity enterprise and corporate clients as well as our high bandwidth home customers.
Some say that selling bandwidth alone is not interesting from an earnings perspective.
Realistically, selling bandwidth should and must be the main focus of any data-centric fixed-line provider. There are many global examples of companies which continue to churn out sustainable growth profits by staying focused on the bandwidth business. While it may sound sexy to diversify to address various buzzword and disruptive industries, doing so merely distracts from our objective of continuing to take part in the massive growth opportunity that the Internet and content lifestyle have to offer.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7465575&sec=business
By RISEN JAYASEELAN
risen@thestar.com.my
IN October 2008, then 30-year-old Afzal Abdul Rahim (pic) emerged as a new shareholder and chief executive of the ailing Time dotCom Bhd (TdC). Afzal's entry into TdC was via his vehicle called Global Transit International Sdn Bhd (GTI) and the deal was structured this way: Khazanah Nasional Bhd would transfer 30% of its holdings in TdC into a special purpose vehicle (SPV) called Pulau Kapas Ventures Sdn Bhd (PKV) resulting in Khazanah getting 61.2% of PKV. GTI, in turn, injected its wholly-owned subsidiary Global Transit Communications Sdn Bhd (GTC) into the SPV, with GTI then being given the balance 38.8% of the PKV.
Now two years later, after having met milestones at TdC the company has shown five consecutive quarters of earnings and revenue growth he is set to gain control over TdC by injecting his prized assets into the company. Confident and chatty, Afzal, a mechanical engineering graduate from the University of Sussex, breezes through questions effortlessly, especially the tough ones about whether he is cashing out or injecting his assets at too high a price.
Excerpts:
Q: What is your reaction to the sell down of TdC shares a day after the deal was announced?
A: The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. However, to give perspective, many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base.
One view is that the capital reduction was ill-timed, in the sense that it should not have been coupled with a deal that was primarily aimed at enhancing shareholder value. What are your comments?
The capital reduction and consolidation is necessary to enhance shareholders value moving forward. For TdC to leapfrog in its end to end service and business offerings, it needs to acquire these assets. Furthermore, we wanted to acquire using TdC shares as currency in order to commit the vendors of the assets to TdC. TdC can't issue shares as its share price is below the par value of RM1. So there is really no way out but to do capital reduction and consolidation of shares for the eventual benefit of TdC.
Why such a small capital repayment? Why not sell more DiGi.Com Bhd shares and give a higher capital repayment?
We believe in this business and that we can generate earnings moving forward. But we have then to decide if we are a profit and dividend yielding company or a growth company. We've managed to turn the company around and profitability is growing. The dividends from DiGi.Com shares are now a core part of our earnings. If we sell DiGi.Com shares and return that money to shareholders, then we are denying our shareholders future earnings. Selling the DiGi.Com shares also indicates that we lack long-term confidence in our business.
So what are the long-term plans with the DiGi.Com shares?
We will do what's best for our shareholders. We're very happy with DiGi.Com's performance as a company. If we did decide to sell the DiGi.Com shares, we would have to think whether to return the money to shareholders or to invest it in our business. But right now we have a lot of confidence in our business. DiGi gives us a certain return from the dividends. If we were to invest it, we must ensure that we can get at least the same amount, if not more than those returns.
One contention of this deal is that some of the assets that you are injecting into TdC are being valued at very high prices. For example RM105mil for GTL, which is a loss-making company.
The valuations were jointly decided by TdC's advisors together with an independent financial advisor, Public Investment Bank, which was appointed by the two independent directors of TdC Ronnie Kok Lai Huat and Balasingham Namasiwayam. In addition, TdC's chairman Abdul Kadir Kassim is a firm believer in governance and due process. What this valuation shows is that there is upside if the acquisitions go through.
As an example, GTL owns 10% of the Unity cable system that was built at a cost of US$300mil and whose replacement cost is many times that. Furthermore, the biggest barrier to entry for submarine cables isn't just cost but to actually be invited to participate in the cable. Then there is the matter of putting a value on the capacity of the cable based on market prices for bandwidth. The Unity submarine cable was just completed in April 2010 and the company was only operational in April. The past two years' results reflect the phase of cable construction. The book value reflects only the historical construction cost of the asset while the value of the asset today lies in its market price of the cable bandwidth capacity and earnings potential. At a capacity of 480 Gbps being GTL's portion of the Unity cable, monthly wholesale lease prices currently at US$59,000 per 10 Gbps and an asset life of more than 10 years, GTL is a strategic asset that will provide the TdC with cost advantages and access to the regional wholesale market.
But is there going to be an over-capacity of submarine cables?
Not across the Trans-Pacific, I don't think so.
Can you and TdC actually monetise the submarine cable?
Unity was commissioned only in May and GTC has already sold 10% capacity of the initial 48Gbps.
Can you give us some colour on PKV and how you are increasing your stake there from 38.8% to 51%?
I have been working 18-hour days since 2000 to build these companies which are like my children. If I am going to inject these companies into TdC, I will want to have some control over them. I also have to put my money where my mouth is, and inject all my businesses into TdC at a valuation that is ascribed by the independent financial advisors. I am also activating a call option to pay Khazanah for more TdC shares. These companies are earning year-to-date around RM13mil. I am giving that away.
But these companies don't seem to have a long enough profit track record?
AIMs has been around since 1990. It has been profitable since 2000. The losses that you see were because we had gone into the Singapore market to build a data centre and had to pull out during the bad economic times in 2007, so there was an investment loss. Profits from operations have always been positive in AIMs.
What about this earn out structure that Khazanah has with you? When will your shareholding in PKV increase in accordance with this agreement?
The agreement between Khazanah and us is so onerous that we will only get our earn-out at the end of the three-year period, meaning end of next year. So even though we have exceeded our targets, the earn-out structure (whereby we will get more PKV shares due to our performance) will only kick in end-2011. We are now paying for more PKV shares via a call option.
So why didn't you wait until 2011 to get control over PKV and thereby the 30.04% block of TdC?
By then, it may be more expensive for TdC to buy these companies. For example, GTC's growth rates are stunning. These companies are growing at a higher rate than TdC. The longer we wait to do the deal, the more expensive it is going to get for TdC to buy these companies. There are also certain operational and business synergies that need to kick in now, for the whole group of companies to be competitive.
How would you describe the new TdC, post acquisitions?
This will allow TdC to entrench itself as a leading regional wholesale player with a specific emphasis on high availability data services addressing a much wider part of the value chain than we have ever offered before.
What did you actually do to extract more value out of TdC's fibre-optic network since becoming the companies' CEO?
Fibre is our key asset and will always remain that. All we did was to understand market demands and requirements and match that to where our infrastructure was present. We also simplified our technology and engineering aspects of our network and significantly increased utilisation across our nationwide fibre presence. So long as there continues to be a strong relationship between customer demand and the manner of which we deploy our network, we will continue to extract value from our fibre asset base. A prime example of this is how we managed to use the same cause of fibre to serve our mobile backhaul customers, high capacity enterprise and corporate clients as well as our high bandwidth home customers.
Some say that selling bandwidth alone is not interesting from an earnings perspective.
Realistically, selling bandwidth should and must be the main focus of any data-centric fixed-line provider. There are many global examples of companies which continue to churn out sustainable growth profits by staying focused on the bandwidth business. While it may sound sexy to diversify to address various buzzword and disruptive industries, doing so merely distracts from our objective of continuing to take part in the massive growth opportunity that the Internet and content lifestyle have to offer.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7465575&sec=business
Can Time dotCom move to the next level?
Saturday November 20, 2010
By RISEN JAYASEELAN
risen@thestar.com.m
ON the face of it, it does seem that the market doesn't think much of the two-pronged corporate deal that Time dotCom Bhd (TdC) announced early this week. On Tuesday, the day after TdC's announcement, its share price took a beating, dropping by 14 sen to 63 sen by the end of that day although it has since recovered slightly, closing at 65.5 sen yesterday.
While the jury is still out on the merits of TdC's proposals, Afzal Abdul Rahim, the main character in the story, says the reaction is to be expected.
The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. Many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base, Afzal says.
Afzal Abdul Rahim (left) and TdC independent director Balasingham Namasiwayam at a media briefing to announce its proposal to buy three companies for RM339mil
But others remain unimpressed. Says one head of research, The proposals don't seem to be doing anything fundamentally different to TdC. It is proposing to buy a few companies that do not show much visibility in terms of how they will bring earnings enhancements for TdC, she says.
To recap, TdC is paying RM339mil, mostly in TdC shares, to buy three companies owned mainly by Afzal. TdC is also proposing a capital repayment of 2 sen per share, while rationalising its balance sheet by writing off part of its share capital that is not represented by available assets.
While the capital reduction exercise is welcomed by analysts, there are some concerns about valuations and the related party transaction (RPT) nature of the deal. There is also a worry that Afzal may be cashing out, considering that there is a RM90mil of cash being paid out by TdC for these companies.
On the onset though, a few facts need to be established. Firstly Afzal and parties associated with him as well as Khazanah Nasional Bhd aren't going to be voting on the proposals, leaving the matter entirely in the hands of minority shareholders to decide.
Tan Sri Wan Azmi Wan Hamzah is one of the funders for Afzal’s submarine cable venture
Secondly, while the proposals will give Afzal control over TdC, they were very much in the plans when Khazanah first picked Afzal in October 2008 to aid in the turnaround of the then-ailing TdC.
Thirdly, the acquisitions are being paid mostly in shares, indicating that Afzal is in for the long haul.
That leaves the issues of the valuations of the companies being bought.
In a note to clients this week, Maybank Investment states: The reason why the market may be viewing the deal unfavourably is due to the nature of it being a related-party transaction and the perception that its CEO Afzal is cashing out. Furthermore, there is very little information on the stock and the merits of the deal as it remains under-covered by the research community. We have been following the company closely and believe that the current share price weakness presents a great buying opportunity.
The note adds that Afzal will be getting paid mostly in shares rather than cash given that the RM339mil deal will be financed by 75% shares and 25% cash. This suggests that Afzal will be in this for the long haul.
Are the valuations justified?
One of the companies being bought is Global Transit Communications (GTC) that essentially sells international bandwidth and IP transit services to telcos, large and medium-sized-corporations (for their own private networks) and Internet service providers (ISPs) in the region.
According to the announcement by TdC, GTC made a net profit of RM5.1mil for the first nine months of 2010. If annualised, the profits should be around RM6.8mil. Thus, based on the purchase price of RM105mil, the asset is being bought at 15.5 times its earnings.
Low Yee Huap, head of research, HLG Research reckons the price is fair. GTC's growth will be driven by data growth numbers regionally. Based on its consistent growth trend both in terms of revenues and profits, GTC has strong earnings potential and is well positioned to leverage on the booming data and internet growth in the Asia-Pacific region. Valuation-wise the purchase price of GTC at 15 times FY2010 annualised earnings is at a discount to TdC's own price earnings multiple of about 25 times, Low says.
However, GTC reported losses in 2007 and 2008, its earlier years of operations, leading some to question if GTC's earnings are sustainable.
But GTC's profits ballooned after that, from only RM231,000 in FY2009 to RM5.1mil in the nine months of FY2010 while its revenues grew from RM10.9mil in FY2008 to RM20.7mil in FY2009 and to RM36mil in the nine months of FY2010.
TdC's announcement points out that the rise in GTC's earnings were due to the company reaching more efficiencies in its operations and to higher bandwidth utilisation by customers coupled with the introduction of new services.
GTC is on a fast growth trajectory. In fact if TdC were to acquire GTC in the future, it will likely cost (TdC) more, says Afzal.
Then there's AIMS Group, another company to be bought by TdC.
TdC will be paying RM128mil for this company, RM25mil in shares and RM38.4mil in cash.
AIMS, which is a data centre operator, is Afzal's first business, having joined the company, then owned by Formis Resources Bhd, in 2000. He then led a management buyout of AIMS in 2006, implementing a business-driven culture within the group, something which he is said to have also inculcated in TdC.
It should be noted though that the AIMS Group is made up of three companies, AIMS Asia Group, AIMS Data Centre 2 and AIMS Cyberjaya.
Consolidating these three companies profit before tax figures for the nine months in FY2010 these companies are deemed tax exempt due to their Multimedia Super Corridor (MSC)-status the profit figure comes up to RM5mil. Annualised, this amounts to close to RM7mil, indicating that that TdC is paying 18 times earnings for these companies.
Two of the three companies in the AIMS group however also suffered losses in FY2007 and FY2008. Afzal explains that the AIMS companies have been profitable since 2000 and the losses in 2007 and 2008 were due to investment losses for pulling out of the Singapore market, where they had ventured to build a data centre but were hit by the global financial crisis.
Hong Leong's Low, one of the few research analysts who has written extensively about TdC in recent times, is also positive on the AIMS acquisitions.
The Asia Pacific data centre business, according to industry reports, is growing at a 15%-18% CAGR in the coming years. AIMS in particular, having achieved a critical mass of 188 carriers as its client-base, is uniquely positioned to benefit from this growth, he says.
Getting a slice of a submarine cable
Perhaps the most interesting proposed purchase in the exercise is that of Global Transit Ltd (GTL). In a sense, GTL is one of Afzal's biggest coup, considering its rarity. Afzal, via GTL, managed to work his way in a deal with the big boys of the Internet and telecommunications space. GTL today owns 10% of the recently-commissioned Unity Cable System, a 9,620km submarine cable system from Asia to the United States, which is banking on a growth of Asia to US data connectivity. The other shareholders of the cable system are Google (20%), who were part of the front runners of the project, India's Bharti Airtel Ltd (10%), Korea's KDDI Corp (10%), SingTel (10%) and Pacnet Ltd, the Singapore-based and listed operator of undersea phone and Internet cables in Asia (40%).
According to insiders, Afzal had been contacted by one Erikas Napjus, Google Inc's global infrastructure manager, a couple of years ago, when the Internet giant had first wanted to take up some data centre space in Malaysia. Napjus is said to have turned down AIMS then due to the latter not meeting the standards required by Google. Following that, Afzal had remained in contact with Napjus and received advice on how to raise the quality of his data centers. That in turn led to a friendship as how technology entrepreneurs are apt to connect. Some time later, Napjus offered Afzal a chance to participate in the submarine cable, an opportunity that Afzal naturally jumped at.
Wan Azmi an early investor
Huge capital was required to be part of consortium and through some contacts, Afzal raised venture capital funding from certain parties. It is these parties who are part of the owners of GTL and who are receiving the cash and shares from TdC. The venture capitalists or angel investors as they are sometimes called, include Halfmoon Bay, owned by tycoon Tan Sri Wan Azmi Wan Hamzah, an active investor in private companies and founder of Land & General Bhd, and Accurate Gain Profits, owned by Tan Sri Mohd Razali Abdul Rahman, the chairman of Peremba. Another investor is Continuum Capital, a venture capital firm owned by Khazanah.
All these investors, according to the announcement by TdC, had pumped in US$12mil (RM37mil) since 2008 to fund their entry into the submarine cable project.
In exchange for the company now, they are receiving RM52.5mil in cash and another RM52.5mil in TdC shares.
The cable was completed and operational in April this year and GTL only received the necessary licence from the relevant authorities to start charging for its services last month. According to TdC's announcement, GTL will achieve a revenue of US$30,000 (RM94,000) in November 2010 alone.
To be noted is that GTL's portion of the 4.8 Tbps (tera bits per second) submarine cable is an entitlement of 480 Gbps (giga bits per second), which can scale up to 1 Tbps.
But while all this sounds interesting, the question is, can the asset make money?
Afzal says that GTL has already sold 10% capacity of the initial 480Gbps that GTL is entitled to from the cable, but he declined to reveal prices.
According to industry reports though, the current retail price of trans-Pacific bandwidth is US$700,000 to US$1mil per year per 10 GBps.
Assuming a price of say US$800,000 per 10Gbps, then GTL's 1 Tbps can theoretically fetch somewhere close to US$76.8mil (RM230mil). While bandwidth prices do erode at 18% to 20% every year, with an asset life of more than 10 years, the math works out very much in Time DotCom's favour, points out Hong Leong's Low.
Back to Afzal. While he is receiving some cash from the sale of his assets into TdC, he is likely to be using a big portion of that money to pay for exercising his options to raise his stake in PKV, the special purpose vehicle owning 30% of TdC.
According to TdC's announcement, Afzal is exercising options to increase his stake in PKV to 51%.
When Afzal first came into PKV in 2008, it was via injecting GTL into PKV. At that time, Khazanah is said to have picked Afzal via a selection committee comprising independent professionals from the telecommunications and corporate sectors. Khazanah's managing director Tan Sri Azman Mokhtar had then said that the move was made to ensure the long-term operational and financial stability of TdC.
Azman had then said that the committee believed that Afzal and GTL were the best candidates for the task to turn around TdC as they have the entrepreneurial skills and telecommunications experience as well as sound management.
GTC was then injected at a price of RM48.2mil, which gave GTI 38.8% in PKV. Thus, this valued PKV at about RM124.2mil. Khazanah on the other hand had injected its direct holding of TdC of 30.04% into PKV, to own 61.2% of the latter.
Hence for Afzal to exercise options to bring his stake in PKV to 51%, he is likely to be spending more than RM15mil.
Also to be noted is that the announcement reveals that there is a portion of deferred consideration of up to RM128mil to be paid by PKV to Afzal's vehicle, upon the Afzal meeting certain conditions. These conditions are believed to relate to certain profit milestones and could take place in a year's time and are part of the earn out clause that was in the original shareholder agreement between Khazanah and Afzal. That consideration is to be paid in PKV shares, meaning that going forward, Afzal will likely emerge as owning much more 51% of PKV and by that, a higher degree of control over the 30.04% block of shares in TdC.
We have exceeded all our milestones thus far, says Afzal.
In the end though, Afzal will have to convince the minority shareholders of TdC that the deals being proposed are for the long-term good of the comanpy and not aimed solely at benefiting him or other individuals personally. No wonder Afzal has been busy trying to explain this deal to analysts and fund managers over the last few days.
The proposals in a nutshell
TIME dotCom Bhd (TdC) announced on Monday that it proposed to buy three companies for RM339mil. The three companies were AIMS Group, which would be acquired for RM128mil, of which RM38.4mil would be in cash, Global Transit Communications Sdn Bhd (GTC) for RM106mil in stock and Global Transit Ltd (GTL) for RM105mil, of which RM52.5mil would be in cash and the balance in shares. It also proposed to make a capital repayment to existing shareholders totalling RM50.6mil, equal to 2 sen a share, as well as a 90% capital reduction and share consolidation exercise.
TdC, which has a paid-up capital of RM2.53bil, comprising 2.53 billion shares of RM1 each, is proposing to cancel 90 sen of the par value of its shares. It is proposing to then consolidate its 2.53 billion 10 sen par value shares into 506.15 million 50 sen par value shares, on the basis of five shares of 10 sen par value into one share of 50 sen par value in TdC.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7468015&sec=business
By RISEN JAYASEELAN
risen@thestar.com.m
ON the face of it, it does seem that the market doesn't think much of the two-pronged corporate deal that Time dotCom Bhd (TdC) announced early this week. On Tuesday, the day after TdC's announcement, its share price took a beating, dropping by 14 sen to 63 sen by the end of that day although it has since recovered slightly, closing at 65.5 sen yesterday.
While the jury is still out on the merits of TdC's proposals, Afzal Abdul Rahim, the main character in the story, says the reaction is to be expected.
The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. Many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base, Afzal says.
Afzal Abdul Rahim (left) and TdC independent director Balasingham Namasiwayam at a media briefing to announce its proposal to buy three companies for RM339mil
But others remain unimpressed. Says one head of research, The proposals don't seem to be doing anything fundamentally different to TdC. It is proposing to buy a few companies that do not show much visibility in terms of how they will bring earnings enhancements for TdC, she says.
To recap, TdC is paying RM339mil, mostly in TdC shares, to buy three companies owned mainly by Afzal. TdC is also proposing a capital repayment of 2 sen per share, while rationalising its balance sheet by writing off part of its share capital that is not represented by available assets.
While the capital reduction exercise is welcomed by analysts, there are some concerns about valuations and the related party transaction (RPT) nature of the deal. There is also a worry that Afzal may be cashing out, considering that there is a RM90mil of cash being paid out by TdC for these companies.
On the onset though, a few facts need to be established. Firstly Afzal and parties associated with him as well as Khazanah Nasional Bhd aren't going to be voting on the proposals, leaving the matter entirely in the hands of minority shareholders to decide.
Tan Sri Wan Azmi Wan Hamzah is one of the funders for Afzal’s submarine cable venture
Secondly, while the proposals will give Afzal control over TdC, they were very much in the plans when Khazanah first picked Afzal in October 2008 to aid in the turnaround of the then-ailing TdC.
Thirdly, the acquisitions are being paid mostly in shares, indicating that Afzal is in for the long haul.
That leaves the issues of the valuations of the companies being bought.
In a note to clients this week, Maybank Investment states: The reason why the market may be viewing the deal unfavourably is due to the nature of it being a related-party transaction and the perception that its CEO Afzal is cashing out. Furthermore, there is very little information on the stock and the merits of the deal as it remains under-covered by the research community. We have been following the company closely and believe that the current share price weakness presents a great buying opportunity.
The note adds that Afzal will be getting paid mostly in shares rather than cash given that the RM339mil deal will be financed by 75% shares and 25% cash. This suggests that Afzal will be in this for the long haul.
Are the valuations justified?
One of the companies being bought is Global Transit Communications (GTC) that essentially sells international bandwidth and IP transit services to telcos, large and medium-sized-corporations (for their own private networks) and Internet service providers (ISPs) in the region.
According to the announcement by TdC, GTC made a net profit of RM5.1mil for the first nine months of 2010. If annualised, the profits should be around RM6.8mil. Thus, based on the purchase price of RM105mil, the asset is being bought at 15.5 times its earnings.
Low Yee Huap, head of research, HLG Research reckons the price is fair. GTC's growth will be driven by data growth numbers regionally. Based on its consistent growth trend both in terms of revenues and profits, GTC has strong earnings potential and is well positioned to leverage on the booming data and internet growth in the Asia-Pacific region. Valuation-wise the purchase price of GTC at 15 times FY2010 annualised earnings is at a discount to TdC's own price earnings multiple of about 25 times, Low says.
However, GTC reported losses in 2007 and 2008, its earlier years of operations, leading some to question if GTC's earnings are sustainable.
But GTC's profits ballooned after that, from only RM231,000 in FY2009 to RM5.1mil in the nine months of FY2010 while its revenues grew from RM10.9mil in FY2008 to RM20.7mil in FY2009 and to RM36mil in the nine months of FY2010.
TdC's announcement points out that the rise in GTC's earnings were due to the company reaching more efficiencies in its operations and to higher bandwidth utilisation by customers coupled with the introduction of new services.
GTC is on a fast growth trajectory. In fact if TdC were to acquire GTC in the future, it will likely cost (TdC) more, says Afzal.
Then there's AIMS Group, another company to be bought by TdC.
TdC will be paying RM128mil for this company, RM25mil in shares and RM38.4mil in cash.
AIMS, which is a data centre operator, is Afzal's first business, having joined the company, then owned by Formis Resources Bhd, in 2000. He then led a management buyout of AIMS in 2006, implementing a business-driven culture within the group, something which he is said to have also inculcated in TdC.
It should be noted though that the AIMS Group is made up of three companies, AIMS Asia Group, AIMS Data Centre 2 and AIMS Cyberjaya.
Consolidating these three companies profit before tax figures for the nine months in FY2010 these companies are deemed tax exempt due to their Multimedia Super Corridor (MSC)-status the profit figure comes up to RM5mil. Annualised, this amounts to close to RM7mil, indicating that that TdC is paying 18 times earnings for these companies.
Two of the three companies in the AIMS group however also suffered losses in FY2007 and FY2008. Afzal explains that the AIMS companies have been profitable since 2000 and the losses in 2007 and 2008 were due to investment losses for pulling out of the Singapore market, where they had ventured to build a data centre but were hit by the global financial crisis.
Hong Leong's Low, one of the few research analysts who has written extensively about TdC in recent times, is also positive on the AIMS acquisitions.
The Asia Pacific data centre business, according to industry reports, is growing at a 15%-18% CAGR in the coming years. AIMS in particular, having achieved a critical mass of 188 carriers as its client-base, is uniquely positioned to benefit from this growth, he says.
Getting a slice of a submarine cable
Perhaps the most interesting proposed purchase in the exercise is that of Global Transit Ltd (GTL). In a sense, GTL is one of Afzal's biggest coup, considering its rarity. Afzal, via GTL, managed to work his way in a deal with the big boys of the Internet and telecommunications space. GTL today owns 10% of the recently-commissioned Unity Cable System, a 9,620km submarine cable system from Asia to the United States, which is banking on a growth of Asia to US data connectivity. The other shareholders of the cable system are Google (20%), who were part of the front runners of the project, India's Bharti Airtel Ltd (10%), Korea's KDDI Corp (10%), SingTel (10%) and Pacnet Ltd, the Singapore-based and listed operator of undersea phone and Internet cables in Asia (40%).
According to insiders, Afzal had been contacted by one Erikas Napjus, Google Inc's global infrastructure manager, a couple of years ago, when the Internet giant had first wanted to take up some data centre space in Malaysia. Napjus is said to have turned down AIMS then due to the latter not meeting the standards required by Google. Following that, Afzal had remained in contact with Napjus and received advice on how to raise the quality of his data centers. That in turn led to a friendship as how technology entrepreneurs are apt to connect. Some time later, Napjus offered Afzal a chance to participate in the submarine cable, an opportunity that Afzal naturally jumped at.
Wan Azmi an early investor
Huge capital was required to be part of consortium and through some contacts, Afzal raised venture capital funding from certain parties. It is these parties who are part of the owners of GTL and who are receiving the cash and shares from TdC. The venture capitalists or angel investors as they are sometimes called, include Halfmoon Bay, owned by tycoon Tan Sri Wan Azmi Wan Hamzah, an active investor in private companies and founder of Land & General Bhd, and Accurate Gain Profits, owned by Tan Sri Mohd Razali Abdul Rahman, the chairman of Peremba. Another investor is Continuum Capital, a venture capital firm owned by Khazanah.
All these investors, according to the announcement by TdC, had pumped in US$12mil (RM37mil) since 2008 to fund their entry into the submarine cable project.
In exchange for the company now, they are receiving RM52.5mil in cash and another RM52.5mil in TdC shares.
The cable was completed and operational in April this year and GTL only received the necessary licence from the relevant authorities to start charging for its services last month. According to TdC's announcement, GTL will achieve a revenue of US$30,000 (RM94,000) in November 2010 alone.
To be noted is that GTL's portion of the 4.8 Tbps (tera bits per second) submarine cable is an entitlement of 480 Gbps (giga bits per second), which can scale up to 1 Tbps.
But while all this sounds interesting, the question is, can the asset make money?
Afzal says that GTL has already sold 10% capacity of the initial 480Gbps that GTL is entitled to from the cable, but he declined to reveal prices.
According to industry reports though, the current retail price of trans-Pacific bandwidth is US$700,000 to US$1mil per year per 10 GBps.
Assuming a price of say US$800,000 per 10Gbps, then GTL's 1 Tbps can theoretically fetch somewhere close to US$76.8mil (RM230mil). While bandwidth prices do erode at 18% to 20% every year, with an asset life of more than 10 years, the math works out very much in Time DotCom's favour, points out Hong Leong's Low.
Back to Afzal. While he is receiving some cash from the sale of his assets into TdC, he is likely to be using a big portion of that money to pay for exercising his options to raise his stake in PKV, the special purpose vehicle owning 30% of TdC.
According to TdC's announcement, Afzal is exercising options to increase his stake in PKV to 51%.
When Afzal first came into PKV in 2008, it was via injecting GTL into PKV. At that time, Khazanah is said to have picked Afzal via a selection committee comprising independent professionals from the telecommunications and corporate sectors. Khazanah's managing director Tan Sri Azman Mokhtar had then said that the move was made to ensure the long-term operational and financial stability of TdC.
Azman had then said that the committee believed that Afzal and GTL were the best candidates for the task to turn around TdC as they have the entrepreneurial skills and telecommunications experience as well as sound management.
GTC was then injected at a price of RM48.2mil, which gave GTI 38.8% in PKV. Thus, this valued PKV at about RM124.2mil. Khazanah on the other hand had injected its direct holding of TdC of 30.04% into PKV, to own 61.2% of the latter.
Hence for Afzal to exercise options to bring his stake in PKV to 51%, he is likely to be spending more than RM15mil.
Also to be noted is that the announcement reveals that there is a portion of deferred consideration of up to RM128mil to be paid by PKV to Afzal's vehicle, upon the Afzal meeting certain conditions. These conditions are believed to relate to certain profit milestones and could take place in a year's time and are part of the earn out clause that was in the original shareholder agreement between Khazanah and Afzal. That consideration is to be paid in PKV shares, meaning that going forward, Afzal will likely emerge as owning much more 51% of PKV and by that, a higher degree of control over the 30.04% block of shares in TdC.
We have exceeded all our milestones thus far, says Afzal.
In the end though, Afzal will have to convince the minority shareholders of TdC that the deals being proposed are for the long-term good of the comanpy and not aimed solely at benefiting him or other individuals personally. No wonder Afzal has been busy trying to explain this deal to analysts and fund managers over the last few days.
The proposals in a nutshell
TIME dotCom Bhd (TdC) announced on Monday that it proposed to buy three companies for RM339mil. The three companies were AIMS Group, which would be acquired for RM128mil, of which RM38.4mil would be in cash, Global Transit Communications Sdn Bhd (GTC) for RM106mil in stock and Global Transit Ltd (GTL) for RM105mil, of which RM52.5mil would be in cash and the balance in shares. It also proposed to make a capital repayment to existing shareholders totalling RM50.6mil, equal to 2 sen a share, as well as a 90% capital reduction and share consolidation exercise.
TdC, which has a paid-up capital of RM2.53bil, comprising 2.53 billion shares of RM1 each, is proposing to cancel 90 sen of the par value of its shares. It is proposing to then consolidate its 2.53 billion 10 sen par value shares into 506.15 million 50 sen par value shares, on the basis of five shares of 10 sen par value into one share of 50 sen par value in TdC.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7468015&sec=business
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
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
Wednesday, November 17, 2010
Monday, November 15, 2010
Thursday, November 11, 2010
Monday, November 8, 2010
P1 unveils latest USB modem & packages, offers sneak peak of MiFi device Click on the picture for specifications
P1 has unveiled a new more powerful USB modem, the UH-235, that will support the new P1 4G On-The-Go Broadband Plans for W1GGY, Super W1GGY and P1 4G Supreme Add-On plans.
The new USB modem has an advanced antenna that radiates and receives signals from any direction and automatically selects the best antenna (within the modem) to improve signal strength for better uplink performance.
For optimum indoor use, the modem is also fitted with a suction cup to fix the modem to a window or wall. It also comes with an accompanying 1 meter USB cable giving the user the flexibility to sit away from the window yet still enjoy a strong P1 4G service.
Additionally, the UH-235 is also bigger when compared to the earlier W1GGY modem, and comes in white with green side panes.
Current P1 4G Home users can immediately subscribe to the P1 4G Supreme Add-On at RM30 extra per month.
Other users will have to wait until 15 November, when the UH-235 will be available with the W1GGY and SuperW1GGY plans under its Free Modem Rental scheme.
The W1GGY plan offers download speeds up to 1.5Mbps with a 10GB fair usage threshold and a standard monthly subscription of RM89. On the other hand, the SuperW1GGY plan offers download speeds of up to 10Mbps and comes with a fair usage threshold of 15GB for RM129 per month.
The W1GGY and SuperW1GGY plans are also replacing the W1GGY 89 and W1GGY 129 plans, which have been discontinued.
Additionally, the Casual W1GGY plan has replaced the W1GGY 59 plan, and now offers a 600Kbps download speed with up to 6GB fair usage threshold for RM59 per month. However, the Casual W1GGY plan comes with the US-230 or UM-230 modem.
P1 also gave a sneak peek of its next on-the-go device, the MF-230 portable personal hotspot, which it expects to officially launch early next year.
As a wireless router or MiFi device, the MF-230 will enable Internet access to be shared amongst multiple WiFi-enabled devices simultaneously. It also has a rechargeable battery that is expected to last for up to four hours of active usage.
Published Date : 08 November 2010
Source : P1 press release
Read more: http://www.mygadgets.my/product.php?id=1238/Article/index_html#ixzz14l2n76Ze
The new USB modem has an advanced antenna that radiates and receives signals from any direction and automatically selects the best antenna (within the modem) to improve signal strength for better uplink performance.
For optimum indoor use, the modem is also fitted with a suction cup to fix the modem to a window or wall. It also comes with an accompanying 1 meter USB cable giving the user the flexibility to sit away from the window yet still enjoy a strong P1 4G service.
Additionally, the UH-235 is also bigger when compared to the earlier W1GGY modem, and comes in white with green side panes.
Current P1 4G Home users can immediately subscribe to the P1 4G Supreme Add-On at RM30 extra per month.
Other users will have to wait until 15 November, when the UH-235 will be available with the W1GGY and SuperW1GGY plans under its Free Modem Rental scheme.
The W1GGY plan offers download speeds up to 1.5Mbps with a 10GB fair usage threshold and a standard monthly subscription of RM89. On the other hand, the SuperW1GGY plan offers download speeds of up to 10Mbps and comes with a fair usage threshold of 15GB for RM129 per month.
The W1GGY and SuperW1GGY plans are also replacing the W1GGY 89 and W1GGY 129 plans, which have been discontinued.
Additionally, the Casual W1GGY plan has replaced the W1GGY 59 plan, and now offers a 600Kbps download speed with up to 6GB fair usage threshold for RM59 per month. However, the Casual W1GGY plan comes with the US-230 or UM-230 modem.
P1 also gave a sneak peek of its next on-the-go device, the MF-230 portable personal hotspot, which it expects to officially launch early next year.
As a wireless router or MiFi device, the MF-230 will enable Internet access to be shared amongst multiple WiFi-enabled devices simultaneously. It also has a rechargeable battery that is expected to last for up to four hours of active usage.
Published Date : 08 November 2010
Source : P1 press release
Read more: http://www.mygadgets.my/product.php?id=1238/Article/index_html#ixzz14l2n76Ze
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