Contents :
INTRODUCTION
We refer to our previous announcements to the Kuala Lumpur Stock Exchange dated 17 August 2000, 20 September 2001 and 30 November 2001 in relation to Telekom Malaysia Berhad’s (“TM”) investments in Ghana Telecommunications Co. Ltd (“GT”).
BACKGROUND
As a result of the privatisation of GT, TM through a consortium company G-Com Limited (“GCL”) acquired a 30% equity interest for USD 38 Million. A Stock Purchase and Sale Agreement (“SPSA”) between GCL and the Ministry of Finance of the Republic of Ghana was signed on 16 December 1996. Currently, TM International Sdn Bhd (“TMI”), a wholly owned subsidiary of TM, has an equity interest of 85% in GCL.
GT operates both fixed and mobile networks for a period of twenty (20) years under the telecommunications licence. In addition, GT was granted an exclusivity period for the provisions of Voice Telephony Service (other than Cellular Communication Services) for five (5) years, effective 20 February 1997.
Consequently, a Technical and Consultancy Agreement (“TCSA”) was signed between TM and GT to facilitate the provision of technical and operational expertise from TM to GT during the exclusivity period. Currently, TM has deployed 15 personnel to GT and the amount due from GT for services rendered to date is USD 6.96 million.
According to the SPSA, GCL was given the right to nominate four (4) Directors including a Managing Director.
On 7 April 2000, the Government of Ghana offered to sell to TM an additional 15% equity interest in GT. On 18 August 2000, TM paid a sum of USD 50 million as deposit for the proposed acquisition, subject to the terms and conditions as specified in the Heads of Agreement (HOA) dated 10 August 2000. The deadline to conclude the transaction has since lapsed on the 19 February 2002.
LATEST DEVELOPMENT
We wish to announce to the Exchange on the following latest development pertaining to our investment in GT: -
- The Government of Ghana through the Ministry of Communications and Technology has decided and announced the following during a press conference held on 20 February 2002 (Ghana time):
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- That the exclusivity period in telephony in Ghana is deemed to have expired at the close of work on the 19 February 2002;
- That the present composition of the Board of GT of four (4) members representing the GCL and three (3) members representing the Government of Ghana will be changed to six (6) members representing the Government of Ghana and three (3) members representing GCL; and
- That the TCSA, which expired on 19 February 2002, is not renewed. However, to enable a smooth transition to whatever body that would provide Technical and Consultancy Services to GT, the Government of Ghana is granting a three-month stay to TM management team.
We wish to inform that, as of to date, the present composition of the Board of GT still remain, as any changes to the said composition would have to be made in accordance with the terms and conditions of the SPSA and the Company Regulations (the Ghanaian equivalent of the Company’s Memorandum and Articles of Association).
TM is still discussing with the Government of Ghana to address the above issue arising from their decisions.
- In respect of the proposed purchase of additional 15% equity interest in GT by TM, we wish to inform the Exchange that the parties are not able to complete the sale of the transaction upon its expiry date on 19 February 2002 as both parties have mutually agreed not to proceed with the proposed transaction. Consequently, the deposit payment of USD 50 million becomes due and payable to TM under the terms and conditions of the HOA. TM has notified the Government of Ghana on this matter and has commenced negotiation on the terms and conditions for the refund of the deposit.
The Government of Ghana acknowledged in their letter dated 14 December 2001 that the said deposit would be become due and payable to TM, in accordance with the terms and conditions of the HOA, in the event that the sale transaction could not be completed upon its expiry date on 19 February 2002.
3) On 21 February 2002, the Government of Ghana issued an official letter recognising TM as an equity partner in GT and assured that TM’s interest and rights are adequately provided and protected under the Ghanaian Law. Further the Government of Ghana expressed hope that both parties can work towards a win-win situation. TM believes that there are still avenues for the issues to be resolved amicably with the Government of Ghana. Nevertheless, the company is evaluating all options with respect to its investments in Ghana. TM will announce further development on the above at the appropriate time.