|
Type |
Reply to query |
| Reply to Bursa Malaysia's Query Letter - Reference ID | NM-070709-52834 |
| Subject | ARTICLE ENTITLED : "TM may return surplus cash to shareholders" |
“Telekom Malaysia Bhd may return surplus cash to shareholders if it does not make any acquisitions within 18 months…”
We wish to clarify to the Securities Exchange that TM has made known to the public, its intention to look for investment opportunities in South Asia and South East Asia regions. This is in line with its aspiration to become a leading regional telecommunication Company. It is evident that the last two years, saw TM making significant new investments in Indonesia (PT Excelcomindo Pratama Tbk in 2005), Singapore (MobileOne Limited in 2005) and India (Spice Communications Limited in 2006).
With the exception of MobileOne, the above investments were primarily financed by TM’s internally generated funds. In addition, TM has also increased its dividend pay-out ratio from 39% in 2004 to 55% of Profit After Tax And Minority Interests (PATAMI) in 2006, whilst TM Company’s debt has declined from RM8.9 billion in 2004 to RM7.8 billion in 2006. Despite this, TM Company’s surplus cash continue to remain high with cash balances of RM2.2 billion as of 31st March 2007.
As a growing regional telecommunication Company, TM aims to seek out investment opportunities in this region to diversify its business and tap into the high growth markets. Such investments may be financed through a combination of cash and debt. However, these investment opportunities are dependent on various factors such as availability of assets, valuation and overall investment climate. The timing for any potential investment to materialize may be difficult to ascertain and as such the management have set an 18-month time frame for any decision on the utilization of surplus cash.
In cognizance with our commitment to shareholders, should there be any surplus cash after considering these investment opportunities, we aim to reward our shareholders better.
We refer to the above news article appearing in the New Straits Times,
Business Times, page 35, on Saturday, 7 July 2007, 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:-
"Telekom Malaysia Bhd may return surplus cash to shareholders if it does not
make any acquisitions within 18 months..."
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
TAN YEW ENG
Head, Issuers
Listing Division, Group Regulations
TYENMA
c.c:- Encik Chung Tin Fah, Securities Commission (via fax)
| Company Name | TELEKOM MALAYSIA BERHAD |
| Stock Name | TM |
| Date Announced | 10 Jul 2007 |
| Category | General Announcement |
| Reference No | TM-070710-58417 |