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Reply To The Media Statement Dated 17 June 2002 By Technology Resources Industries Berhad (TRI)

25 June 2002

Type Announcement
Subject REPLY TO THE MEDIA STATEMENT DATED 17 JUNE 2002 BY TECHNOLOGY RESOURCES INDUSTRIES BERHAD (TRI)

Contents :

On 17 June 2002, the Board of TRI issued a media statement wherein a number of issues in relation to the following were raised:

  1. When Telekom Malaysia Berhad and Telekom Enterprise Sdn Bhd (collectively “TM”) will make a general offer (“GO”) for TRI;
  2. At what price TM will make a GO for TRI; and
  3. On what terms will the proposed merger of TM Cellular Sdn Bhd (“TM Touch”) and Celcom (Malaysia) Berhad (“Celcom”) take place.

The Board of TRI indicated that it is prepared to support Telekom Enterprise Sdn Bhd’s (“TESB”) nomination to the Board of TRI once the terms for a merger have been agreed and documented.

On 20 June 2002, the Board of TRI sent a letter to TM indicating their desire to:

(i) Commence discussions immediately on terms of a merger with TM Touch;
(ii) Exchange of information on TM Touch and Celcom to allow for due diligence to take place; and
(iii) Agree a timetable to announcement.

TM's response to the issues raised in the media statement on 17 June 2002 is detailed below:

Uncertainties over timing and pricing of an offer

TM's advisers opined that under the Malaysian Code on Takeovers and Mergers (the "Code"), the offer period for a mandatory offer commences upon the execution of an agreement wherein the intent to undertake a mandatory offer is expressly stated. The offer price for any such mandatory offer will be the highest price paid during the six (6) months prior to the execution of the agreement.

TM last purchased TRI shares at RM2.75 (the highest price TM has paid for TRI shares) on 30 April 2002. Hence, according to the Code, should a merger agreement be executed between TM and TRI by 29 October 2002, the offer price for any resulting mandatory offer by TM on TRI would be not less than RM2.75 per share.

When representatives of TM and TRI met on 7 May 2002, TM proposed a timetable which envisaged the signing of a merger agreement by June 2002. TM believes that if the Board of TRI had agreed to work towards the timetable proposed by TM on 7 May 2002, there would now be greater certainty for shareholders with regards to the timing and offer price of any mandatory offer by TM.

Discussions on the proposed merger however did not progress as a result of the TRI Board's insistence that TM's representation on the Board of TRI is conditional upon the merger exercise.

TM wishes to reiterate its stand that any merger process is separate and distinct from the request for representation on the Board of TRI. TM's action on the proposed Board changes is consistent with the rational behaviour of the largest shareholder of any company. The composition of the Board of TRI must reflect the ownership structure of TRI, regardless of the outcome of the negotiations of the merger. As the existing Board of TRI does not support the proposed Board changes, it is TM's right to seek representation via a democratic process i.e. the Extraordinary General Meeting ("EGM") on 16 July 2002 where all shareholders can attend and decide on the matter. TRI shareholders are encouraged to assess the situation carefully and vote in accordance with what is best for TRI.

TM is committed to the merger process and will endeavour to work towards a timetable which envisages the execution of merger documents on or before 29 October 2002. It is not the intention of TM to delay the execution of such documents in order to avoid having to undertake a mandatory offer at RM2.75.

The proposed merger process

TRI in its announcement dated 17 June 2002 stated that the TRI Board shall only support TM's nomination on the Board after the terms of the merger have been agreed and documented. As mentioned earlier, the merger process is separate and distinct from TM's request for representation on the Board of TRI and should therefore be considered separately.

TM acknowledges the receipt of a letter from the Board of TRI dated 20 June 2002 setting out its intention to commence merger discussions. TM welcomes TRI's initiative on this matter. In line with TM's intentions all along, TM welcomes a transparent, constructive and expedient merger process for the benefit of TRI and its shareholders and will endeavour to ensure that any merger agreement is executed as early as possible.

Delay in seeking shareholders' approval on Board representation

TM regrets that whilst the Board of TRI had in their announcement dated 23 May 2002 stated that shareholders should be given the opportunity to decide on the direction of the company, the Board of TRI has only chosen to allow TRI shareholders the opportunity to decide on this important matter on the last possible date as provided under the Companies Act, 1965 (a period of 2 months), i.e. 16 July 2002, instead of earlier.

TM's request for board representation could have been put forward for the consideration of TRI shareholders' on 26 June 2002, the date of TRI's 34th Annual General Meeting and Recurrent Related Party Transaction EGM or alternatively on 2 July 2002 as proposed by TM in its request letter dated 17 May 2002.

Announcement Info

Company Name TELEKOM MALAYSIA BERHAD
Stock Name TELEKOM
Date Announced 25 Jun 2002
Category General Announcement
Reference No TM-020625-67409