Contents :

• On behalf of the Board of Directors of TM, Commerce International Merchant Bankers Berhad ("CIMB") is pleased to announce that on 9 December 2004, the Company entered into sale and purchase agreement ("SPA") for the acquisition of 618,345 ordinary shares of Indonesian Rupiah ("Rp") 250,000 each in Excelcomindo, for a cash consideration of USD314 million.

• • • (a) Shareholders Agreement

      In recognition of the role of TMIL and the Company as the new strategic investor in Excelcomindo, the Shareholders Agreement allows TMIL the right at all times to nominate a majority of the board of directors (responsible for day-to-day management) and board of commissioners (responsible for supervision and advisory) of Excelcomindo.

      (b) Call and Put Option Agreement

      Upon the occurrence of certain events and elections of the parties set forth therein, the Option Agreement affords TMIL the right or obligation to acquire additional shares of Excelcomindo in excess of a majority of the issued and outstanding share capital of the company.

    • 
      (a) TM International shall acquire the Indocel Shares from Rogan free and clear of any lien and any such limitation or restriction will full rights attaching thereto; and
      
      (b) The Proposed Acquisition of Indocel is subject to completion of the following:
      
      (i) Excelcomindo Share Sale Agreement; and
      
      (ii) Indocel Share Sale Agreement
    • The purchase consideration for the Proposed Acquisition was determined on a willing buyer-willing seller basis after taking into consideration the following:

      (a) The audited net tangible assets ("NTA") of Excelcomindo for the financial year ended 31 December 2003, of Rp1,049,908,899,000;

      (b) Profit before taxation ("PBT") of Excelcomindo based on its audited financial statements for the year ended 31 December 2003 of Rp523,976,877,000; and

      (c) the prospect of TMIL becoming the largest shareholder in Excelcomindo, Indonesia's third mobile telephone operator adopting GSM in Indonesia via the Option Agreement.

  2.1 On 9 December 2004, the Company's subsidiary, TM International (L) Limited ("TMIL") entered into the SPA with Rogan Partners Inc. ("Rogan") and PT Telekomindo Primabhakti ("Telekomindo") for the acquisition of 618,345 ordinary shares of Rp250,000 each in Excelcomindo, representing 27.3% of the issued and paid-up share capital of Excelcomindo, for total cash consideration of USD314 million (approximately RM1,193.2 million.

  2.2 Excelcomindo, established in November 1995, was the third mobile telephone operator to adopt the global system for mobile communications ("GSM") standard in Indonesia, and currently has 4.2 million mobile phone subscribers in Indonesia. Additional information on Excelcomindo is set forth in Section 3 below.

  2.3 TMIL will acquire the 27.3% interest in Excelcomindo at the Closing indirectly through the acquisition of 100% of a special purpose holding company ("Indocel") established in Labuan, Malaysia. As at 9 December 2004, Indocel holds 23.1% equity interest in Excelcomindo. Indocel will enter into a Stock Purchase and Sale Agreement to acquire an additional 4.2% equity interest in Excelcomindo ("Excelcomindo Share Sale Agreement").
  
  2.4 On 8 December 2004, Rogan entered into a Stock Purchase and Sale Agreement to acquire the entire issued and paid-up share capital of Indocel ("Indocel Share Sale Agreement").
  
  2.5 Upon the completion of the SPA, TMIL, Indocel and Telekomindo will enter into a shareholders' agreement ("Shareholders' Agreement") and TMIL and Telekomindo will enter into a call and put option agreement ("Option Agreement" together with the SPA, the Shareholders Agreement and the Option Agreement, the "Transaction Agreements").

  2.6 TMIL has delivered a USD30 million bank guarantee ("Bank Guarantee") as deposit under the SPA, to be set off as liquidated damages for Rogan and Telekomindo if (i) the closing of the SPA is not completed within three (3) months from the date hereof solely as a result of TMIL's failure to perform its obligations under the SPA or (ii) the Company does not obtain the requisite approval of Bank Negara Malaysia for the Proposed Acquisition.
  
  2.7 The other salient terms of the SPA are as follows:2.8 Purchase consideration2.9 Barring unforeseen circumstances, the Proposed Acquisition is expected to be completed within three (3) months from the date of this announcement.

• Excelcomindo was incorporated in the Republic of Indonesia as a limited liability company under the laws of the Republic of Indonesia on 6 October 1989, under the name PT Grahametropolitan Lestari. In 1995, Excelcomindo changed its name from PT Grahametropolitan Lestari to its present name. The present authorised share capital of Excelcomindo is Rp566,250,000 comprising 2,265,000 ordinary shares of Rp250,000 each, all of which have been issued and fully paid-up. The financial information on Excelcomindo for the past five (5) financial years is set out in Table 2.
  
  The principal activity of Excelcomindo is the provision of mobile telecommunications services. Excelcomindo is the third mobile telephone operator adopting GSM standard in the Republic of Indonesia, established in November 1995. It commenced commercial operations in October 1996 using a GSM 900 spectrum which was subsequently complemented with a GSM 1800 spectrum.
  
  To date, Excelcomindo has built an extensive network of base transceiver stations in the Republic of Indonesia, predominantly in Java, Bali, Lombok but also in the major population centres of Sumatra, Kalimantan and Sulawesi. Excelcomindo has also built an end-to-end nationwide transmission backbone utilising the fibre optic network covering all the major cities in Java and microwave network outside Java that is backed by very small aperture terminal (VSAT) links and provides quality transmission of voice and data traffic. Excelcomindo has also deployed high capacity submarine links between Java, Sulawesi and Kalimantan.

  As at 30 September 2004, Excelcomido has approximately 4.2 million subscribers and a market share in the Republic of Indonesia of approximately 15.5%. During the third quarter of 2004, Excelcomindo gained momentum, capturing approximately 18.6% of net mobile subscriber additions. Excelcomindo's subscribers are predominantly prepaid, with 99% subscribing on a pre-paid basis. It recently completed a rebranding and product re-launch exercise where it developed two (2) distinct post-paid products (Bebas and Jempol) and relaunched its post-paid product under the Xplor brand.

  In addition to providing mobile services, Excelcomindo also provides leased line, internet service provider (ISP) and voice over internet protocol ("VoIP") services to meet the needs of corporate customers, particularly in the industries of media and telecommunications, finance and banking, oil and mining and manufacturing.

4. INFORMATION ON Indocel

• Indocel was incorporated in Malaysia as a private unlimited company under the Companies Act, 1965 on 25 October 1995. The present authorised share capital of Indocel is RM100,000 comprising of 100,000 ordinary shares of RM1.00 each, of which 200 ordinary shares of RM1.00 each have been issued and fully paid-up. Indocel is a special purpose vehicle, the sole business activity of which since incorporation involves the holding of Excelcomindo shares.

• • • Rogan is a British Virgin islands investment holding company established by certain equity investors in Excelcomindo to provide the foreign equity investment and overseas financing necessary for the growth of the capital intensive mobile phone business of Excelcomindo and hold indirect ownership of the Excelcomindo shares through Indocel.
    • Telekomindo is a 100% owned Indonesian subsidiary of Rajawali Corporation, a diversified Indonesian conglomerate. Telekomindo was a founding investor in Excelcomindo, and has participated in the conduct of its business since the establishment of Excelcomindo in November 1995.
  5.1 Rogan

  5.2 Telekomindo

• 6.1 Policies on foreign investment and repatriation of profits
  
  Subject to applicable withholding taxes, profits from investments in Indonesian companies can be repatriated in foreign currency without any restrictions.
  
  6.2 Foreign exchange regime
  
  A company may freely hold, purchase and use foreign currency in Indonesia. Subject to disclosure requirements of Bank Indonesia through the financial institution where the transaction is made, there is no restriction on the transfer of foreign currency from the Republic of Indonesia, or to the Republic of Indonesia from abroad.

• • • The Proposed Acquisition will not have any effect on the issued and paid-up share capital and shareholdings of substantial shareholders of TM as it will be satisfied entirely in cash.
    • The Proposed Acquisition is not expected to have a material effect on the earnings of TM for the financial year ending 31 December 2004 as the Proposed Acquisition is only expected to be completed after 31 December 2004. However, in the medium to long term, the Proposed Acquisition is expected to contribute positively to the earnings of TM.
    • The proforma effects of the Proposed Acquisition on the NTA of TM, based on the audited consolidated financial statements of TM as at 31 December 2003 and audited consolidated financial statements of both Indocel and Excelcomindo for the financial year ended 31 December 2003 are set out in Table 1.
  7.1 Issued and paid-up share capital and shareholdings of substantial shareholders
  
  7.2 Earnings
  
  7.3 NTA
  

• • • Indonesia is viewed by TM as perhaps the single most important market in fulfilling its strategy of prudent international expansion.

      Despite a comparable gross domestic product per capita to Philippines and China, Indonesia still has a much lower mobile penetration rate of 9.4% (compared to China at 23.7% and Philippines at 32.5%). Given this low penetration together with Indonesia's large population base (Asia's 3rd most populous country), the potential subscriber growth in absolute terms is unrivalled elsewhere in South East Asia. While this growth has already commenced (53% year on year subscriber growth up to second quarter 2004), management feels that there is substantial ongoing potential as penetration rates catch up with the rest of the region, the Indonesian economy improves and affordable products continue to get rolled out beyond the main cities.

      More importantly, the Indonesian market is also regarded as attractive by TM because it is close-to-home, well understood by management and shares many cultural and business ties with Malaysia providing additional value creation opportunities.

    • Management sees Excelcomindo as the best vehicle currently to gain access to Indonesia's growth potential. It has an approximate 15.5% market share and approximately 4.2 million subscribers as at 30 September 2004. Excelcomindo has secured a strong presence in the market with good customer recognition and brand positioning. They have built a high quality mobile network which covers the majority of the key islands as well as a robust transmission infrastructure which management believes is unrivalled in Indonesia. It is developing new markets in corporate data, VoIP and wireless broadband.

      In line with its rapid growth, Excelcomindo has also performed well in financial terms recording gross revenues of RM1.3 billion and a 53% earnings before interest, taxation, depreciation and amortisation (EBITDA) margin in the 12 months ended 30 September 2004.

      Excelcomindo's size will also create additional confirmation of TM's position as a leading regional investor. Based on the proforma revenue for the last 12 months ended 30 September 2004 of TM Group and Excelcomindo, the TM would increase TM's consolidated international revenue from RM1,079 million (8.3 % of total) to RM2,363million (16.6% of total).

      Total mobile subscribers within TM's international portfolio (including associated companies) are expected to increase from 7.1million currently to 11.3 million with Excelcomindo.

      Importantly, the existing management of Excelcomindo is viewed as a competitive advantage, hence requiring minimal additional management assistance from TM.

    • Management believes significant synergies are available due to proximity and interrelationships between Indonesia, Malaysia and the rest of the TM regional network.

      For example, a high level of voice and data traffic currently flows between Indonesian and Malaysia providing ample opportunities for international direct dial (IDD) and interconnect cost efficiencies in the combined entity. There is also the potential to share transmission assets, eliminate redundant investments and secure savings on capital spending through greater combined purchasing power.

      Management also sees many opportunities for development of joint products across both markets, targeting for example, frequent roamers across the two (2) markets. There is also the opportunity to leverage the full regional network in rolling out additional applications as they are developed successfully in particular markets.

    • The structure of the transaction is an additional attractive feature as it ensures that TM gets early control of the company's future direction. By securing board control at the close of the transaction, there is the opportunity to influence strategic direction and operational performance of the company immediately. Limited opportunities for an investment of this nature are available regionally, making Excelcomindo an important component of TM's regional investment plans.
  The acquisition of Excelcomindo confirms TM's position as one of the region's leading mobile investors. Leveraging TM's extensive operating and investment experience, the aim is to build Excelcomindo into an Indonesian market leader and a substantial contributor to the revenues and profits of TM and its subsidiaries ("TM Group").

  8.1 Indonesia as an attractive market

  8.2 Excelcomindo as the best vehicle8.3 Ability to add value8.4 Structural Objectives

• The Telecommunications Industry in Indonesia has experienced significant growth in mobile telecommunication services in recent years. Over the last three years, the growth of the mobile sector in Indonesia has been very strong, in part driven by introduction of prepaid service, reduced handset prices, fixed-to-mobile subscriber substitution, as well as improving domestic economic conditions. The total number of mobile customers in Indonesia increase from 3.7 million as of 31 December 2000 to 18.5 million as of 31 December 2003, representing an increase in mobile penetration from approximately 1.8% to approximately 8.2%. Despite this rapid rate of growth, the mobile penetration rate of 8.2% as of 31 December 2003, is still relatively low compared to many other countries in the region.

  The launch of prepaid services in 1998, which were widely accepted in the Indonesia market, enabled mobile operators to overcome increasing bad debts from the previous years' economic crisis. Investment continues to increase in the mobile telecommunications industry with operators upgrading their networks and consumer spending increasing. Two (2) recent investments by Singapore Telecommunications Limited in PT Telekomunikasi Sellular ("Telkomsel") and Singapore Technologies Telemedia in PT Indonesia Satellite Corporation Tbk ("Indosat") demonstrate the increased attractiveness of the mobile telecommunications industry in Indonesia to investors. Recent investments coupled with the Government's efforts to improve industry structure and regulatory management in the telecommunications sector have created an environment that stimulates competition and is better able to serve the public.

• Excelcomindo operates predominantly in the business of mobile telecommunications in Indonesia. A summary of the risks that Excelcomindo faces is set out below:

• 10.1 Country Factors

• • • Excelcomindo operates predominantly in Indonesia and is subject to the standard operating risks of this emerging market. These could include political risk, regulatory risk and foreign currency risk. TM does not believe that the risks that Excelcomindo faces in Indonesia is any different than other companies in the market. TM also believes that the acquisition of a company with a strong local management team such as Excelcomindo, will help mitigate any country risk factors.

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  10.2 Competition

• • • The market for mobile telecommunications services in Indonesia is competitive. Excelcomindo faces competition from other mobile service providers such as PT Telecomunikasi Sellular ("Telkomsel") and PT Indonesia Satellite Corporation Tbk ("Indosat"), in its core mobile communications business. Excelcomindo has developed a strategy for addressing competition by improving brand identification and providing a differentiated service to its target market segments.

• 10.3 Rapid technology change

• • • The mobile telecommunications industry is characterised by rapid and significant changes in technology. Currently, TM views Excelcomindo as a leader in Indonesia for GSM technology and is also developing a suite of new technology products in areas such as VoIP. However, it is possible future development or application of new or alternatives technologies, could require changes to Excelcomindo's business model or necessitate new investments.

• 10.4 Funding Needs

• • • Excelcomindo is in a capital intensive business that will require additional funding to finance ongoing growth and network expansion. As such, it may be required to raise additional funds in either the debt or equity capital markets. While there can be no assurance for continued access to funds, in the past, Excelcom has successfully accessed the debt market through its bond issuance in January 2004. Excelcom also has plans for an IPO in the first quarter of 2005 which will enable access to equity capital markets as well.

11. APPROVALS REQUIRED

• The approvals required for the Proposed Acquisition are as follows:

  (i) the approval of Bank Negara Malaysia, which was obtained on 8 December 2004;

  (ii) the approval of the Foreign Investment Committee;

  (iii) the exemption from Minister of Finance, through the Labuan Offshore Financial Services Authority, which was obtained on 9 December 2004;

  (iv) any other approvals as may be required under the laws of the Republic of Indonesia for the Proposed Acquisition; and

  (v) the shareholders of TM, if required.

• None of the Directors of TM, substantial shareholders TM and person(s) connected to the Directors and substantial shareholders of TM have any direct or indirect interest in the Proposed Acquisition.

• The Board of Directors of TM, having considered all aspects of the Proposed Acquisition, is of the opinion that the terms and conditions of the Proposed Acquisition are fair and reasonable are in the best interest of the Company.

14. DEPARTURE FROM THE SECURITIES COMMISSION ("SC")'S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES ("SC GUIDELINES")

There is no departure from the SC Guidelines in respect of the Proposed Acquisition.

15. DOCUMENT AVAILABLE FOR INSPECTION

• The SPA is available for inspection at the registered office of TM at Level 51, North Wing, Menara Telekom, Off Jalan Pantai Bharu, 50672 Kuala Lumpur during the normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.