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Launches 10-Year USD 500 Million Bond Issue

14 September 2004

Type

 Announcement
Subject TELEKOM MALAYSIA BERHAD LAUNCHES
10-YEAR USD 500 MILLION BOND ISSUE

Contents :

1. INTRODUCTION

    • Telekom Malaysia Berhad (“TMB”), on behalf of its Board of Directors, is pleased to announce that its wholly owned subsidiary, TM Global Incorporated, a company incorporated in the Federal Territory of Labuan, under the Offshore Companies Act 1990, proposes a 10-Year USD500 million bond issue (“Proposed Bonds Issue”). The Proposed Bonds Issue will also be guaranteed by TMB. The Proposed Bonds Issue has been launched on 9 September 2004 and the same was closed on 13 September 2004 in London.


2. DETAILS OF THE PROPOSED BONDS ISSUE

    • Summary of Principal Terms of the Proposed Bonds Issue

      Please refer to Table 1.

3. RATIONALE FOR THE PROPOSED BONDS ISSUE

    • The proceeds to be raised from the Proposed Bonds Issue would enable Telekom to fund its existing non-ringgit refinancing needs and future overseas investments by its group of companies (the “Group”) without the need to convert the equivalent Ringgit amount of the Group’s domestic funds to be remitted overseas.

4. EFFECTS OF THE PROPOSED BONDS ISSUE
    • The Proposed Bonds Issue will not have any effects on TMB’s:-

      (i) issued and paid up share capital;
      (ii) shareholdings and substantial shareholding structure; and
      (iii) dividend policy.

      The Proposed Bonds Issue should not have any material effect on the TMB Group’s:

      (i) net tangible assets based on the latest audited accounts for the financial year ended 31 December 2003; and
      (ii) earnings for the financial year ending 31 December 2003.

5. APPROVALS OBTAINED

    • The following approvals were obtained by The Issuer and/or the Guarantor in relation to the Proposed Bonds Issue:

      1. the approval of the Ministry of Finance on 8th September 2004;
      2. the approval of Bank Negara Malaysia on 6th September 2004; and
      3. the approval of the Labuan Offshore Financial Services Authority on 6th September 2004.

This announcement is dated 14 September 2004.

Table 1: Summary of Principal Terms of the Proposed Bonds Issue
1. Issuer : TM Global Incorporated.
2. Guarantor : Telekom Malaysia Berhad.
3. Issue : U.S.$500 million aggregate principal amount of 5.25 per cent guaranteed bonds due 2014 unconditionally and irrevocably guaranteed by the Guarantor.
4. Issue Price : 99.754 per cent.
5. Interest : The Bonds will bear interest at the rate of 5.25 per cent per annum.
6. Interest Payment Date : Interest on the Bonds is payable semi-annually in arrears on 22 March and 22 September in each year, commencing on 22 March 2005.
7. Maturity : 22 September 2014.
8. Form and Denomination : The Bonds will be in registered form in the denomination of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. The Bonds will be represented by the Global Note Certificate in registered form, which will be registered in the name of a nominee of, and deposited with a common depositary for, Euroclear and Clearstream, Luxembourg.
9. Status : The Bonds will constitute, subject to the negative pledge, direct, unsecured and unsubordinated obligations of the Issuer and which shall at all times rank pari passu among themselves and at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, save for such exceptions as may be provided by applicable legislation. The payment obligations of the Guarantor under the Guarantee will constitute direct, unsecured and unsubordinated obligations of the Guarantor which will at all times rank at least pari passu with all other present and future unsecured and unsubordinated obligations of the Guarantor, save for such exceptions as may be provided by applicable legislation.
10. Negative Pledge and Other Covenants : A description of the negative pledge and other covenants applicable to the Issuer, the Guarantor, Celcom and any Future Significant Subsidiary is described in the offering circular under the heading "Terms and Conditions of the Notes - Negative Pledge; Limitation upon Sale and Leaseback Transactions; Consolidations, Merger and Sale of Assets.
11. Taxation : In the event that certain taxes are payable in respect of payments pursuant to the Bonds or under the Guarantee, Issuer or Guarantor (as the case may be) will pay additional amounts as will result in receipt by the Bondholders of such amounts as would have been received by them had no such withholding or deduction been required.
12. Final Redemption : Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amount on 22 September 2014.
13. Tax Redemption : The Bonds may be redeemed, at the option of the Issuer, in whole but not in part, at their principal amount, if, as a result of certain changes in the laws or regulations affecting Labuan or Malaysian taxes, the Issuer (or, if a demand is made under the Guarantee, Guarantor) has or will become obliged to pay additional amounts in respect of such taxes.
14. Redemption at the option of Bondholders : The Bonds may be redeemed, at the option of the Bondholders, if the Government or an entity controlled by the Government ceases to retain the Special Rights Preference Share of the Guarantor and ceases to own and control more than 50 per cent. of the issued and outstanding share capital of the Guarantor.
15. Sale Restrictions : The Bonds are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S.
16. Governing Law : English law.
17. Trustee : Noblehouse International Trust Ltd.
18. Principal Paying Agent and Transfer Agent : Deutsche Bank AG, Hong Kong Branch.
19. Registrar and Transfer Agent : Deutsche Bank Luxembourg S.A.
20. Trust Deed : The Bonds will be issued under a trust deed, to be entered into among Issuer, Telekom and the Trustee (the “Trust Deed”).
21. Further Issues : The Issuer may from time to time, without consent of the Bondholders and in accordance with the Trust Deed, create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects except for the first payment of interest) so as to form a single series with the Bonds. The Issuer may from time to time, with the consent of the Trustee, create and issue other series of bonds having the benefit of the Trust Deed.
22. Use of Proceeds : The net proceeds of the issue of the Bonds, after deducting underwriting fees and certain transaction related expenses, will be on-lent by the Issuer to the Guarantor and applied by the Guarantor principally for the refinancing of existing debt and general working capital purposes.
23. Rating : The Bonds have been rated A3 by Moody’s and A- by S&P. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, revision or withdrawal at any time by the assigning rating agency.
24. Listing : Application has been made to list the Bonds on the Luxembourg Stock Exchange and the Labuan International Financial Exchange.

Announcement Info

Company Name TELEKOM MALAYSIA BERHAD
Stock Name TELEKOM
Date Announced 14 Sept 2004
Category General Announcement
Reference No MM-040913-80230