Telekom Malaysia Bhd (TM) on Friday announced a demerger of the group’s mobile and fixed-line business which will see Celcom (Malaysia) Bhd being transferred to TM International Sdn Bhd.
TM International, which would become the holding company known as RegionCo for all of the group’s mobile and non-Malaysian businesses, would thereafter be listed on Bursa Malaysia by second quarter of 2008.
The remaining TM Group (FixedCo), after the demerger, would comprise the fixed-line voice, data and broadband services and other telecommunication and non-telecommunication related businesses.
FixedCo would remain listed as TM on the Main Board.
The demerger, to be completed before the second quarter of next year, would create two entities to serve the different market segments within the telecommunications industry.
All in all, the structure for the massive exercise to create two leading telecommunication companies – a regional mobile champion and a domestic broadband champion, would be finalised in December this year.
TM’s shares have been suspended since yesterday pending today’s announcement. Its pre-suspension price was RM9.70.
RegionCo has a total 31.8 million subscribers in high growth markets in Asia.
FixedCo has 4.4 million fixed-line subscribers and 1.1 million broadband subscribers as at June 30, 2007.
TM said the demerger would accelerate operational improvements and growth efforts through clearer strategic and organisational focus, provide greater transparency on the financial and operational performance of each entity and improve the execution capacity of the respective entities.
TM Group’s public-listed subsidiaries, namely PT Excelcomindo Pratama TBK (XL), Dialog Telekom Limited (Dialog) and VADS Berhad (VADS) would remain listed on their respective stock exchanges.
Both RegionCo and FixedCo would have their own board and management teams as well as their own set of key performing index (KPI), TM said.
The exercise would also involve a management shake-up, with the current group chief executive officer (CEO) for TM, Datuk Abdul Wahid Omar, to assume the RegionCo group CEO’s designated position while Zamzamzairani Mohd Isa, currently the CEO of the group’s Malaysian business, would be the designated CEO for FixedCo group.
Datuk Seri Shazally Ramly, however, remains as Celcom CEO.
The linkage between two companies after the demerger is via the government’s investment arm -Khazanah Nasional Bhd, which would hold a 40 percent equity each in RegionCo and FixedCo.-Bernama