Business

Friday September 28, 2007

TM decoupling ops?

By B.K. SIDHU



Separate entities seen for fixed-line/broadband and cellular businesses

PETALING JAYA: Telekom Malaysia Bhd (TM) is expected to announce a decoupling of its fixed-line/broadband and cellular businesses today as part of its rationalisation exercise.

The split would see the creation of two entities that would have their own boards and management teams. Each entity will also be responsible for its own bottom line.

While details are sketchy, it is learnt that all the overseas cellular operations, including Malaysia’s Celcom (M) Bhd, would be parked under the cellular operations in a new company to be set up. All the broadband to TM Net and TM streamyx, the wholesale and its fixed-line businesses would come under another company.

Both the entities would be listed on Bursa Malaysia, one offering exposure to cellular operations and the other, fixed-line/broadband/wholesale business.

It is unclear who would head the two units, which would have a holding company.

The decoupling exercise is to better reflect the different businesses and their earnings. This would give investors greater clarity when making investment decisions.

It is hoped that the creation of two units would result in greater efficiency and transparency, besides giving better access to funding to grow them.

Also yesterday, Deputy Prime Minister Datuk Seri Najib Tun Razak announced the award of a public-private RM15.2bil high-speed broadband service project to TM. In line with this, the fixed line/broadband/wholesale business would focus on rolling out high-speed forward.

Sources said the timeline for the completion of the exercise was set for the second quarter of 2008.

It is also learnt that TM chairman Tan Sri Radzi Mansor and group chief executive officer Datuk Abdul Omar had met and briefed Prime Minister Datuk Seri Abdullah Ahmad Badawi on the proposal earlier this week.

TM shares were suspended at noon yesterday at the request of the company. It is understood that top TM officials had briefed the senior management team on the decoupling exercise yesterday evening. TM shares last traded at RM9.70, up five sen.

The rumour mill was on an overdrive when the shares were suspended. Different scenarios were bandied about as to what the possible announcement entailed.

Among others, there was speculation that TM would announce a major acquisition, said to be in Vietnam. Two others had it that a capital repayment was on the cards or even a possible re-listing of Celcom. Even Wahid was not spared as speculation has it that he would be leaving TM for a bigger portfolio in a bank.

Whatever it is, TM's decoupling exercise will allow for the true value of the operations to be reflected under the separate units.

 
TM :  [Stock Watch]  [News] 
CELCOM :  [Stock Watch]  [News]


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