Greener BeeGreen GadgetsTM to inject fresh capital into P1

KUALA LUMPUR: Telekom Malaysia Bhd (TM), the country’s largest fixed-line and broadband operator, is taking a controlling stake in mobile broadband service provider Packet One Networks (M) Sdn Bhd (P1) by injecting fresh capital of more than RM1 billion, according to sources.

“The deal will allow TM to get a foothold in mobile broadband service … mobility is a missing part of its business portfolio as mobile data service is the trend moving forward, judging by the gadgets that we are using,” a source familiar with the deal told The Edge Financial Daily yesterday.

“The existing shareholders of P1 will receive some cash from the deal. However, their shareholding will be diluted,” the source added.

Green Packet Bhd is the controlling shareholder of P1, with a 57% stake while South Korea-based SK Telecom Co Ltd holds a 26% equity interest. The trading of shares in TM and Green Packet is suspended from today.

In an announcement to Bursa Malaysia yesterday, TM said the request for suspension was in view that the group “intends to enter into a transaction that requires an announcement to be made pursuant to Chapter 10 of the listing requirements”.

Meanwhile, Green Packet said the trading suspension is pending a material announcement. When contacted on the matter, Green Packet group managing director Puan Chan Cheong said, “We will make an announcement in due course,”without denying a possible deal with TM.

P1’s 2.6 GHz LTE and 2.3 GHz spectrum for WiMAX is the crown jewel that TM is eyeing. P1 is the core unit of Green Packet, which has been loss-making for the last five financial years. Industry players see the heavy investments in P1, which has a fast cash burning rate, putting a strain on Green Packet’s financials.

For the financial year ended Dec 31, 2012, P1’s revenue stood at RM338 million, up from the previous year’s RM293 million, resulting from subscriber growth from 415,000 to 517,000, of which 84,000 are subscribers of P1’s fixed voice service, according to Green Packet’s annual report.

This article first appeared in The Edge Financial Daily, on March 27, 2014.

Article source: http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=282219&Itemid=79


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