Business

Friday February 27, 2009

TMI proposes to raise RM5.25bil via rights issue


KUALA LUMPUR: TM International Bhd (TMI), which posted a net loss of RM515.2mil for the fourth quarter ended Dec 31 against a net profit of RM519.9mil a year earlier, has proposed to raise RM5.25bil in a rights issue to pay its debts.

Revenue for the quarter fell to RM2.42bil from RM2.75bil.

Net loss per share was 14 sen compared with earnings per share (EPS) of 15 sen previously.

For the full financial year (FY08), TMI reported a 5% growth in earnings before interest, tax, depreciation and amortisation (ebitda) to RM4.36bil against RM4.13bil in FY07.

Datuk Seri Jamaludin Ibrahim (right) and executive director and group CFO Datuk Yusof Annuar Yaacob at the media briefing on Thursday.

Its revenue jumped 14% to RM11.3bil from RM9.99bil due to continued momentum at Celcom (M) Bhd and a strong yearly performance at Indonesian unit PT Excelmindo Pratama Tbk (XL).

But TMI’s net profit for 2008 stood at RM498mil, down 72% from RM1.78bil in FY07.

In a briefing yesterday, executive director and group chief financial officer Datuk Yusof Annuar Yaacob said the lower net profit was mainly due to forex losses, higher interest charges and its share of loss of RM154mil at its Indian associate, Spice Communications Ltd.

He said Celcom delivered its best quarterly performance of the year.

Its net profit for the quarter ended Dec 31 increased to RM336mil from RM300mil previously.

Celcom’s revenue for the period increased 11% to RM1.47bil from RM1.33bil a year ago.

TMI president and group chief executive officer Datuk Seri Jamaludin Ibrahim said TMI had three reasonably good quarters of revenue and profit growth but its fourth quarter results were “slightly dented”.

He said the company hoped to do better this year despite a challenging year.

“We are still concerned about the impact of the global crisis on the economy and the industry.

“On the other hand, given the group is well positioned to add significant value to the operations and inflation is subsiding, we are quite hopeful we will do better this year,” Jamaludin said.

On the rights issue, he said the proceeds raised would predominantly be used to pay debts.

“The funds raised used for repayment of borrowings will improve our capital structure and save the group RM300mil to RM350mil per annum on interest,” he said.

To a question, Jamaludin said a rights issue was decided upon as it was inclusive in nature and allowed all its shareholders to take part.

“The offering is a proactive and prudent step from management, allaying investors’ concern on lingering balance sheet questions,” he added.

Khazanah Nasional Bhd, which controls 44.5% of TMI, has agreed to undertake to subscribe its full entitlement in the new shares and an additional 20%, subject to regulatory and shareholder approvals.

The exercise is expected to be completed by the end of the second quarter.

“We are currently negotiating with a couple of banks to underwrite the rights issue. The details will be announced in March and the proposal subject to shareholders’ approval in an EGM,” Yusof said.

TMI was listed on April 28, 2008 after a demerger from Telekom Malaysia Bhd (TM).

As part of the demerger exercise, TMI has to repay TM RM4bil by April 24.

“The rights issue will probably be completed after April 24, therefore we will have to repay the RM4bil to TM first due to the timing difference,” Yusof said.

Meanwhile, in a statement to Bursa Malaysia, TMI said its directors had approved the proposed change in the company’s name to Axiata Group Bhd but the proposal was subject to shareholders’ approval at an EGM.

 
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