Telekom Malaysia - Investor Relations

Type	Announcement
Subject	SUPPLEMENTAL JOINT LAND DEVELOPMENT AGREEMENT BETWEEN TM FACILITIES SDN BHD ("TM Facilities"), A WHOLLY-OWNED SUBSIDIARY OF TELEKOM MALAYSIA BERHAD ("TM"), AND MAGNA PRIMA BERHAD ("MPB")

On 20 April 2004, TM announced [Reference No: TM-040420-60471] the Joint Land Development Agreement between TM Facilities and MPB, to jointly develop TM’s freehold land measuring 46,048 square feet held under Lot 305, Seksyen 63, Mukim and District of Kuala Lumpur, State of Wilayah Persekutuan (the “Project Land”) (“the Principal Agreement”). According to the Principal Agreement, the consideration to TM Facilities for development of the Project land was 20% of the Gross Development Value (GDV) equivalent to RM36.4 million payable over four-year development period inclusive of a minimum guaranteed land cost of RM15.3 million. TM wishes to announce that TM Facilities has on 4 August 2006, entered into a Further Supplemental Agreement (“FSA”) with MPB for MPB to buy out (outright purchase) the Project Land from TM Facilities for a total cash consideration of approximately RM32.5 million consisting of RM15.3 million, representing the Guaranteed Land Cost (“GLC”) subject to the terms and conditions of the FSA, and a further cash payment of approximately RM17.2 million being the GDV Joint Development (JD) Entitlement defined in the Principal Agreement.

Salient Terms of the FSA

1. The total consideration of RM32.5 million shall be payable by MPB to TM Facilities as follows:

(a) the sum of RM3,533,398.40 being the part payment paid by MPB to TM Facilities under the Principal Agreement shall be used by MPB as a payment of the deposit in the FSA; and

(b) the sum of RM28,966,601.60 within two (2) months from the unconditional date of the FSA or on or before 21 December 2006, whichever is earlier;

2. The FSA is conditional upon the fulfillment of all of the following conditions precedent (“Conditions Precedent”) namely:

(a) The approval of the Foreign Investment Committee being obtained by MPB for the purchase of the Project Land upon the terms and conditions of the FSA;

(b) The respective approvals of the Board of Directors of MPB and the shareholders of MPB at a general meeting being obtained by MPB for the purchase of the Project Land upon the terms and conditions of the FSA;

(c) The approval of the Board of Directors of TM Facilities being obtained for the sale of the Project Land upon the terms and conditions of the FSA; and

(d) The approvals of any other relevant authorities, if required;

3. In the event that the Conditions Precedent shall not have been fulfilled to the satisfaction of TM Facilities and MPB within three (3) months from the date of the FSA, then the FSA shall terminate and be of no further effect whatsoever whereupon TM Facilities shall revert back to the Principal Agreement and be entitled to claim from MPB any outstanding payment of the GDV JD Entitlements together with any interest accrued thereon pursuant to the Principal Agreement; and

4. The sale and purchase of the Project Land shall be completed on the date the total consideration of RM32.5 million has been settled in full to TM Facilities within the Completion Period. Upon the completion of the sale and purchase of the Project Land, the Principal Agreement shall be terminated and all the terms and conditions therein contained shall cease to be of legal effect.

Rationale for the FSA

The proposed disposal of the Project Land is in line with TM Group’s strategic direction to rationalize and be more focus on core activities.

Financial Effect

The proposed disposal of the Project Land is not expected to have any material adverse impact on the Net Asset of TM Group for the financial year ending 31 December 2006 and is expected to contribute positively towards the earnings of TM Group.

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 FSA.

This announcement is dated 4 August 2006.

Announcement Info

Company Name	TELEKOM MALAYSIA BERHAD
Stock Name	TM
Date Announced	4 Aug 2006
Category	General Announcement
Reference No	TM-060804-CCB71

Supplemental Joint Land Development Agreement Between TM Facilities Sdn Bhd ("TM Facilities"), A Wholly-Owned Subsidiary Of Telekom Malaysia Berhad ("TM"), And Magna Prima Berhad ("MPB")

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Announcement Info