Contents :

• 1.0 INTRODUCTION
  • We refer to our earlier announcement on 30 December 2005 (Ref No: TM-050531-54763) regarding the intended disposal of Wisma TM, Jalan Pantai Baharu, Kuala Lumpur and the sale and purchase agreement between Telekom Malaysia Berhad ("TM" or "the Company"), Cygal Development Sdn. Bhd. and Ital-Pacific Development Sdn. Bhd. for the Acquisition of Tower 1 and Tower 2, Plaza Cygal .
  • TM is pleased to announce that the Company has concluded and entered into a Sale and Purchase Agreement with University of Malaya (“UM”), for the disposal of a twenty-five (25) storey office building known as Wisma TM, Jalan Pantai Baharu, Kuala Lumpur (“Wisma TM”) for a purchase consideration of RM70 million ("the SPA"). The estimated net floor area of the office tower is 223,211 square feet (excluding usable area at podium estimated at 29,495 square feet) and 241 parking bays.
  2.0 INFORMATION ON UM
• • UM is an institution of higher learning established under the Universities and University Colleges Act, 1971 with its principal address at Lembah Pantai, 50603 Kuala Lumpur.
  3.0 SALIENT TERMS OF THE SPA
  
• • Pursuant to the SPA, UM agreed to purchase Wisma TM for a total consideration of Ringgit Malaysia Seventy Million (RM70,000,000-00) subject to and upon the terms and conditions therein contained.

• • Deposit of Ringgit Malaysia Seven Million (RM7,000,000-00) shall be paid by UM to TM’s Solicitors, as stakeholder upon the execution of the SPA and to be released to TM upon fulfillment of all Conditions Precedent.
  • The sale and purchase of Wisma TM shall be conditional upon the following approvals/conditions, no later than six (6) months from the date of the SPA subject to any extension that may be mutually agreed to by the parties:-

• • (i) Approval of the Ministry of Finance and the Ministry of Higher Education, Malaysia for the intended acquisition of Wisma TM by UM;
  • (ii) Approval of the Jabatan Tanah dan Galian, Wilayah Persekutuan (hereinafter referred to as the “State Authority”) for revision of the Express Conditions from “Komplek Asrama” to “Perdagangan”;
  • (iii) Approval of the State Authority for the consent to the transfer of Wisma TM in favour of UM;
  • (iv) Approval of the Foreign Investment Committee (hereinafter referred to as “the FIC”) for the intended acquisition of Wisma TM by UM and other relevant statutory authorities in respect of the acquisition of Wisma TM; and
  • (v) the agreement by Pos Malaysia Berhad to relocate its current occupation of a part of Wisma TM;
• 4.0 BASIS OF VALUATION AND SOURCE OF FUND
  
  • The purchase consideration on the proposed acquisition of Wisma TM by UM was arrived at on a willing buyer-willing seller basis.
  • The proceeds from the disposal of Wisma TM will be used to partly pay for purchase consideration for Tower 2, Plaza Cygal.
• 5.0RATIONALE FOR THE DISPOSAL & ACQUISITION\

• The disposal is in line with TM’s strategic direction to rationalize and streamline all its business activities from Wisma TM and other locations, to Tower 1 and Tower 2 of Plaza Cygal, which are located adjacent to Menara TM, TM's Headquarters

• 6.0 FINANCIAL EFFECTS

• • The proposed disposal of Wisma TM is not expected to have any material adverse impact on the earnings and Net Asset of TM for the year ending 31 December 2006.
    

• 7.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST

• In so far as the Directors of TM are aware, none of the Directors nor the major shareholders of TM and/or persons connected to them have any interest, whether direct or indirect, in the SPA.