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Acquisition Of Wholly Owned Subsidiaries, Tekad Mercu berhad And Rebung Utama Sdn Bhd By Telekom Malaysia Berhad

09 October 2007

Type

 Announcement
Subject ACQUISITION OF WHOLLY OWNED SUBSIDIARIES, TEKAD MERCU BERHAD AND REBUNG UTAMA SDN BHD BY TELEKOM MALAYSIA BERHAD

Contents :

Introduction


Telekom Malaysia Berhad ("TM") wishes to announce that it has, on 9 October 2007, acquired two (2) ordinary shares of RM1.00 each in the following companies:

1) Tekad Mercu Berhad (“Tekad Mercu”) for a total consideration of RM2.00; and
2) Rebung Utama Sdn Bhd (“RUSB”) for a total consideration of RM2.00.

(collectively hereafter be referred to as the “Acquisitions”)

Information on Tekad Mercu Berhad (“Tekad Mercu”)

Tekad Mercu was incorporated pursuant to the Companies Act, 1965 on 3 July 2003. The authorized capital of Tekad Mercu is RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each, of which RM2.00 has been issued and fully paid-up.

Information on Rebung Utama Sdn Bhd (“RUSB”)

RUSB was incorporated under the Companies Act, 1965 on 28 June 2003. The authorized capital of RUSB is RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each, of which RM2.00 has been issued and fully paid-up.

Rationale for the Proposed Acquisitions

In 2003, TM has issued conventional stapled securities comprising :

(a) 1,000 RPS A and 1,000 RPS B and RM1,983.4 million nominal value tranche 1 bonds and RM2,000 million nominal value tranche 2 bonds, all issued by TM to Rebung Utama Sdn Bhd (“RUSB”), a special purpose company incorporated for purposes of the conventional stapled securities; and

(b) 1,987 RPS A and 2,000 RPS B issued by RUSB to Tekad Mercu, a special purpose company incorporated for the purposes of the conventional stapled securities.

At its Extraordinary General Meeting held on 8 May 2007, TM’s shareholders have approved the proposed issuance of up to RM3,000 million Islamic Stapled Income Securities (“Islamic Stapled Income Securities”) to replace an equivalent amount of the Company’s conventional stapled securities with Islamic-based financing that is Shariah-compliant. The substitution would henceforth enable the Company’s shares to qualify for inclusion in the Dow Jones Islamic Index.

On 20 July 2007, TM has redeemed the conventional stapled securities and issued the Islamic Stapled Income Securities. Subsequent to the redemption of the conventional stapled securities, Tekad Mercu and RUSB shall ceased to function as the required special purpose vehicle companies for the issuance of the conventional stapled securities.

TM’s acquisition of Tekad Mercu and RUSB is the final step towards concluding TM’s corporate exercise of redeeming the conventional stapled securities and issuance of the Islamic Stapled Income Securities.

Financial Impact and Interest of Directors, Substantial Shareholders

The Acquisitions are not expected to have any material impact on the consolidated earnings of TM for the financial year ending 31 December 2007.

None of the Directors, substantial shareholders of the Company and/or persons connected to them has any interest, whether direct or indirect in the Acquisitions.

Announcement Info

Company Name TELEKOM MALAYSIA BERHAD
Stock Name TM
Date Announced 9 Oct 2007
Category General Announcement
Reference No TM-071009-51879