1. INTRODUCTION
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We wish to announce that TM Net Sdn. Bhd. ("TM Net"), a wholly-owned subsidiary of Telekom Malaysia Berhad ("TM"), has today entered into a Channel Supply Agreement with MEASAT Broadcast Network Systems Sdn. Bhd. ("MBNS"), a wholly-owned subsidiary of Astro Malaysia Holdings Berhad (AMH) for the carriage of two (2) Astro SuperSport Channels on HyppTV (“Channel Supply Agreement”).
The Channel Supply Agreement will allow TM Broadband service customers to have access to premium sports content, including selected Barclays Premier League ("BPL") live matches for Seasons 2013/14, 2014/15 and 2015/16 respectively.
2. PARTICULARS OF THE TRANSACTION
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Under the terms of the Channel Supply Agreement, MBNS shall grant to TM Net the non-exclusive right to distribute:
a) Astro SuperSport HD Channel; and
b) Astro SuperSport 2 HD Channel,
to HyppTV subscribers in Malaysia on a linear and pay basis via IPTV. The term of the Channel Supply Agreement is for 3 years, beginning 1 August 2013 ("Term").
In addition to the two Astro SuperSport Channels, the parties have also agreed to enter into an agreement for the carriage of selected NJOI channels subject to certain conditions spelled out in the Channel Supply Agreement
MBNS has also agreed to acquire products and services from TM and/or its affiliates for the Term subject to certain conditions.
3. RATIONALE OF THE CHANNEL SUPPLY AGREEMENT
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The signing of the Channel Supply Agreement will create greater value for HyppTV and the TM Broadband triple-play offering as a whole. The carriage of the two (2) Astro SuperSport channels which offer premium sports content including some of the BPL content on HyppTV will also enhance the attractiveness of TM’s product for its consumers.
4. BRIEF INFORMATION ON THE PARTIES 4.1 TM
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TM, a public listed company duly incorporated in Malaysia on 12 October 1984, with an authorised share capital of RM3,528,003,015 divided into 5,040,000,020 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share of RM1.00, 2,000 Class C Non-Convertible Redeemable Preference Shares (“NCRPS”) of RM1.00 each and 1,000 Class D NCRPS of RM1.00 each. The issued and paid-up share capital of the Company is RM2,504,184,312 comprising 3,577,401,980 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share of RM1.00, 2,000 Class C NCRPS of RM1.00 each and 925 Class D NCRPS of RM1.00 each.
The principal activities of TM are the establishment, maintenance and provision of telecommunications and related services.
4.2 TM Net
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TM Net, a wholly owned subsidiary of TM duly incorporated in Malaysia on 25 October 1997, with an authorised share capital of RM500,000,000 of 500,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of the Company is RM180,000,000 of ordinary shares of RM1.00 each.
The principal activities of TM Net are the provision of internet related services focusing on content and application development and services for internet.
4.3 AMH
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AMH was duly incorporated in Malaysia on 14 February 2011 as a private limited company and had on 18 July 2012 converted to a public limited company. The authorised share capital of AMH is RM1,000,000,000 divided into 10,000,000,000 ordinary shares of RM0.10 each, of which RM519,830,000 comprising 5,198,300,000 ordinary shares of RM0.10 each have been issued and fully-paid up. On 19 October 2012, AMH was listed on the Main Market of Bursa Malaysia Securities Berhad. The principal activity of AMH is investment holding. The AMH group is primarily engaged in the provision of television services, radio services, film library licensing, television content, creation, aggregation and distribution, magazine publication and distribution and multimedia interactive services.
4.4 MBNS
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MBNS was duly incorporated on 12 May 1992, and is a 100% owned subsidiary of AMH. MBNS has an authorised share capital of RM302,860,100 divided into 300,000,000 ordinary shares of RM1.00 each, 285,000,000 Redeemable Convertible Preference Shares of RM0.01 each, 10,000 Class A Redeemable Preference Shares of RM1.00 each and 1,000 Class B Redeemable Preference Shares of RM0.10 each. The issued and paid-up share capital of MBNS is RM260,227,142 comprising 260,217,142 ordinary shares of RM1.00 each and 10,000 Class A Redeemable Preference Shares of RM1.00 each. The principal activity of MBNS is the provision of television services.
5. FINANCIAL EFFECT 5.1 Share capital and substantial shareholders’ shareholdings
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The Channel Supply Agreement will not have any effect on the issued and paid-up share capital as well as the substantial shareholders’ shareholdings of TM.
5.2 Earnings and Net Assets
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The Channel Supply Agreement is not expected to have any material effect to the earnings and net assets of TM Group for the financial year ending 31 December 2013.
6. APPROVALS REQUIRED
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The Channel Supply Agreement is not subject to shareholders’ or any government authorities’ approval.
7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST
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Save as disclosed below, none of the Directors and other major shareholders of TM and/or persons connected to them has any interest, whether direct or indirect, in the Content Acquisition Arrangement:-
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a) Khazanah Nasional Berhad (“Khazanah”), a major shareholder of TM, is also a Major Shareholder of AMH, with an effective interest of 20.73%;
b) Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, a nominee Director of Khazanah; and
c) Nik Rizal Kamil Nik Ibrahim Kamil, alternate director to Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin.
8. AUDIT COMMITTEE STATEMENT
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The Board Audit Committee (BAC) of TM, (save for Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, an Interested Director by virtue of his position as a nominee Director of Khazanah, a common major shareholder), is of the view that the Channel Supply Agreement is in the best interest of TM Group, fair and reasonable and on normal commercial terms, and is not detrimental to the interest of the minority shareholders of TM.
The above view is arrived at after having considered all aspects including the rationale of the proposed Channel Supply Agreement and the value it brings to TM Group.
9. BOARD OF DIRECTORS’ STATEMENT
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The Board of Directors of TM, (save for Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, an Interested Director) having considered the recommendations of the BAC and the rationale of entering into the Channel Supply Agreement with MBNS, is of the view that the transaction is in the best interest of TM Group, fair and reasonable and on normal commercial terms and not detrimental to TM minority shareholders’ interest.
10. TOTAL AMOUNT TRANSACTED WITH THE SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS
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In the preceding 12 months, transactions between TM and its subsidiaries, and AMH and its subsidiaries was approximately RM28.5 million.
This announcement is dated 31 July 2013.
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