Business

Wednesday September 16, 2009

MPHB to increase U Mobile stake to 45.59%

By B.K. SIDHU


PETALING JAYA: As Tan Sri Vincent Tan is buying out the two foreign shareholders in U Mobile Sdn Bhd, Multi-Purpose Holdings Bhd (MPHB) also intends to increase its stake in the celco to 45.59%.

MPHB recently bought a 3.9% stake in U Mobile and is in the process of registering the 15 million shares. It also entered into a put option yesterday to buy a further 41.63% stake, or 145 million shares, in U Mobile over a 13-month period for RM280mil.

Tan is the major shareholder of U Television Sdn Bhd (UTV) which, up to yesterday, had a 67% stake in U Mobile. His stake will rise to nearly 100% with the two foreign shareholders – Japan’s NTT DoCoMo and South Korea’s KT Corp – divesting their 33% stake in U Mobile.

In response to queries from StarBiz, a U Mobile spokesman said: “UTV agreed to acquire all shares from KT Corp & DoCoMo. UTV is the major shareholder of U Mobile and the major shareholder of UTV is Tan.’’

On whether the operations of U Mobile would be disrupted with the exit of the two major foreign shareholders, he said: “No, a new management team has been put in place by Tan to run U Mobile.’’

Reports from Japan yesterday said DoCoMo was making an exit from U Mobile “due to differences of opinion with other shareholders over management.’’ The reports also said KT Corp would be next to exit U Mobile.

The two foreign shareholders bought into U Mobile in April last year and they paid US$100mil each for their respective 16.5% equity stake.

DoCoMo is getting back the original amount of US$100mil for the 16.5% stake it is selling back to UTV and KT Corp is likely to get back the same amount.

For DoCoMo to sell back its stake in U Mobile to UTV at the original price it bought would mean that there could have been a “sell back or put’’ clause in the agreement between UTV and the Japanese giant.

These two foreign players were to lend their expertise to build up a network that would rival other major celcos in the country. U Mobile has a 3G spectrum which it got in 2006 and now has less than 1% market share.

There are 28.5 million mobile subscribers in Malaysia and penetration levels have hit 100.8% by mid-year. Industry regulators expect penetration rates to hit 104.2% by year-end even though growth in the cellular sector is stagnating.

Separately, MPHB told Bursa Malaysia yesterday that it was in the process of finalising the registration of the 15 million shares in U Mobile.

It said it had entered into a “put’’ option agreement with AmBank (M) Bhd to buy a 41.63% stake, or 157.9 million shares, in U Mobile for RM280mil.

These were the shares that had been pledged to the bank presumably by UTV. In case of a default at any time during the 13-month period, AmBank will allow MPHB to exercise the put option. A fee of RM3.5mil for the put option was paid by MPHB to AmBank.

But, why is MPHB not buying the stake directly from UTV?

“It could be an arrangement that was struck between the parties,’’ said a source. To MPHB, it said, U Mobile was a good investment and, in time, MPHB could bring a strategic investor into the celco.

MPHB told Bursa its rationale for the stake purchase in U Mobile would enable it to venture into the business of multimedia interactive TV and telecommunications services which were expected to contribute positively to the future earnings of MPHB.

MPHB said the put option price was arrived on a willing-buyer-willing-seller basis and the audited net assets of U Mobile as at end-2008 was RM1.44 a share. MPHB will finance the put option via internally-generated funds and/or borrowings.


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