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Telekom Malaysia Berhad ("TM") is pleased to announce that Samart Corporations Public Company Limited ("Samart") in which TM holds 24.9% of its equity through its wholly owned subsidiary, Telekom Malaysia International Sdn Bhd ("TMI"), has sold its entire equity interest of 45.58% in Digital Phone Company Limited ("DPC") to Shin Corporations Public Company Limited ("Shin").

Currently TMI holds 49.0% in DPC, a mobile cellular network operator offering GSM 1800 mobile services in Thailand. Pursuant to the sale of DPC shares by Samart to Shin, TMI has entered into a new Shareholders Agreement [hereinafter referred to as "the new DPC Shareholders' Agreement"] with Shin on 10 April 2000.

The new DPC Shareholders' Agreement replaces the previous DPC Shareholders' Agreement entered into between Samart and TMI on 9 June 1997. The shareholdings in DPC after the acquisition of shares by Shin from Samart are as follows :-

Shareholders No. of shares of Baht 10 each Percentage Holdings

TMI 190,580,983 49.00%
Shin 177,339,999 45.58%
Others 21,077,329 5.42%
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Total 388,998,311 100.00%
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Shin is listed on the Stock Exchange of Thailand and 36.88% of its equity is directly held by the Shinawatra family. The present market capitalisation of Shin is over Baht 70 billion.

Shin was established in 1983 to act as a supplier of mainframe computers. It made its first entry into the telecoms industry in 1988 in Thailand, after the government decided to upgrade the country's telecoms infrastructure. The Group's activities cover four main business areas: wireless telecoms business in Thailand, international telecoms ventures through Shenington Investment Pte Ltd, satellite business through Shin Satellite Plc and media businesses through Shinawatra Information Technology Co.

RATIONALE FOR THE NEW DPC SHAREHOLDERS AGREEMENT

The divestment of DPC shares will enable Samart to fully focus and leverage its existing businesses towards developing its internet and e-commerce capabilities with a view towards positioning the company to be a premier player in Thailand. The sale also enables Samart the financial flexibility to restructure its existing debts as well as embark on future strategic business development. As a shareholder in Samart, TM/TMI will benefit from this arrangement.

The new DPC Shareholders' Agreement will enable the management team of DPC to be strengthened and restructured to reflect the change in shareholdings.

FINANCIAL EFFECTS

The transaction is not expected to have any immediate or material impact on the consolidated earnings of TM for the current financial year ending 31 December 2000 and the consolidated net tangible assets per share of TM. DPC is expected to contribute positively to TM's Group earnings in the long term.

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS' INTEREST

In so far as the Directors of TM are aware, none of the Directors nor the substantial shareholders of TM has any interest, whether direct or indirect, in the above said transaction.