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We are pleased to announce that Telekom Malaysia Berhad ("TM") has on 8 February 2002, entered into a Sale and Purchase Agreement with Permodalan Nasional Berhad ("PNB") to acquire PNB's entire equity interest of 55% in GITN Sdn Bhd ("GITN") for a cash consideration of RM11 Million ("Proposed Acquisition") based on the terms and conditions of the Agreement. After the said acquisition, GITN would become TM's wholly owned subsidiary.

Information on GITN Sdn Bhd ("GITN")

GITN was incorporated on 13 March 1996, following a joint venture and shareholders' agreement entered into by TM and PNB on 29 January 1996 where the shareholdings were 45:55 respectively. The principal activity of GITN is to provide and operate a Government Integrated Telecommunications Network which offers total solutions for an efficient and effective electronic exchange of information within and between Government agencies.

Currently, the authorised share capital of GITN is RM50 Million consisting of 50,000,000 ordinary shares of RM1.00 each. Out of its total paid-up capital of RM20 Million consisting of 20,000,000 ordinary shares of RM1.00 each, 9,000,000 shares are held by TM and 11,0000 million shares are held by PNB.

Purchase Consideration

The purchase consideration of RM11 Million for the Proposed Acquisition was arrived at on a willing buyer and willing seller basis to be satisfied wholly in cash from internally generated funds.

Rationale

The entry into the government market through GITN is expected to generate increased revenue from the value propositions to be derived from the Electronic-Government initiatives and the provision of value added services.

The Proposed Acquisition is in line with TM's efforts to rationalise and to re-focus its core activities to create synergy for all its investments and activities to generate revenue and value for its shareholders.

Approvals required

Approval from the Foreign Investment Committee is required for the Proposed Acquisition.

Financial Effects

The Proposed Acquisition is not expected to have an immediate or material impact on the consolidated earnings of TM for the current financial year ending 31 December 2002 and the consolidated net tangible assets of TM. It is expected to contribute positively to the future earnings and cashflow of TM Group.

Interest of Directors and Substantial Shareholders and Persons Connected to them

In so far as the Directors of TM are aware, none of the Directors, major shareholders and/or persons connected to them have any interest, direct or indirect in the Proposed Acquisition.