Contents :

“Malaysia is taking another step in its promised sale of state assets with an issue of around US$750 mil (RM2.76 bil) in bonds convertible into Telekom Malaysia Bhd (TM) shares…”

We wish to inform the Securities Exchange that TM did not issue any ‘convertible bonds’ as stated in the said article.

We wish to also clarify that Khazanah Nasional Berhad (Khazanah), the major shareholder of TM, has on 27 September 2006, announced the issuance of the world’s first Shariah–compliant ‘exchangeable bond’ via a special purpose company, Rafflesia Capital Limited. The offering comprises US$750 million 5-year Certificates due 2011 and is exchangeable into ordinary shares of RM1.00 each of TM currently held by Khazanah.

A copy of the Media Statement from Khazanah with further details is attached herewith.



The offering summary of the exchangeable bonds is as follows:

Deal size : US$750 million, upsized from US$500 million

Periodic payment : 1.25% p.a. payable annually

Yield to maturity : 5.07% p.a.

Reference share price : RM9.1143 per share of TM (1-day VWAP)

Exchange premium : 19%

Exchange price : RM10.85 per share of TM

Issue price : 100%

Maturity : 5 years due October 2011

Listing : Labuan International Financial Exchange and The Stock Exchange of Hong Kong Limited

Query Letter Contents :

We refer to the above news article appearing in The Star, Starbiz, page B5, on
Wednesday, 27 September 2006, a copy of which is enclosed for your reference.
In particular, we would like to draw your attention to the underlined sentence,
which is reproduced as follows:-
"Malaysia is taking another step in its promised sale of state assets with an
issue of around US$750mil (RM2.76bil) in bonds convertible into Telekom
Malaysia Bhd (TM) shares...."
In accordance with the Securities Exchange's Corporate Disclosure Policy, you
are requested to furnish the Securities Exchange with an announcement for
public release confirming or denying the above article and in particular the
underlined sentence after due and diligent enquiry with all the directors,
major shareholders and all such persons reasonably familiar with the matter
about which the disclosure is to be made in this respect. In the event you deny
the above sentence or any other part of the above reported article, you are
required to set forth facts sufficient to clarify any misleading aspects of the
same. In the event you confirm the above sentence or any other part of the
above reported article, you are required to set forth facts sufficient to
support the same.
Please furnish the Securities Exchange with your reply within one (1) market
day from the date hereof.
Yours faithfully

JOHAN ABDULLAH
Head, Listing Division
Group Regulations
TYE/NMA
c.c:- Encik Chung Tin Fah, Securities Commission (via fax)