Telenor reduced stake to 49% in compliance

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Nov 14 2007
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After announced it would give away RM700 million (in exchange for 10-year period of right for 3G license) to loss-making Time DotCom so that Time can nurse its wound, DIGI.com’s parent company, Norway’s Telenor ASA (OSL: TEL) said it has made a gain of 2.6 bln nkr on the sale of a 10.2 percent stake in Malaysia’s DiGi.com, which was carried out in order to comply with the maximum 49 pct equity ownership requirement of the Malaysian government applied to foreign investors.

Telenor sold 76.5 million shares in Malaysian operator DiGi in a book building exercise, representing the remaining shares to meet the 49 percent threshold, at RM 21.5 per share to Malaysian investors for a total of RM 1.61 billion8.9 percent discount over DIGI’s pre-suspension price of RM23.60 a share. Together with the the issuance of 27.5 million new ordinary DiGi shares for Time’s 3G spectrum, Telenor will have a 49 percent ownership in DiGi.
Khazanah the buyer of Digi?The identity of the “Malaysian investors” are not known as of writing but unofficially it could be Khazanah Nasional Berhad as only Khazanah would have such a deep pocket for the purchase. Khazanah also owns 64.6% stake in Time DotCom. Now assuming Khazanah was the buyer and it plans to inject the newly acquired stake into Time DotCom, it simply means Time DotCom could emerge as a strategic shareholder in DIGI. During Wednesday business news on local TV, Time DotCom’s boss already hinted that they wish to subscribe more than 3.5 percent.

If Telenor could sell the 10.2 percent stake (76.5 million shares) at the same price as per-suspension stock price, it could pocketed the cool RM200 million but guess you “need” to give discount for such a large block of shares.

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Time Dot Com today emerged as the main buyer of the Digi.com shares that Telenor placed to the market.

So in addition to getting RM700 million+ for squatting on a 3G Licence, TDC also got a sweet price from CIMB’s so called book-building efforts. At Digi.com’s closing price of RM24.40 today versus the TDC’s purchase price of RM21.50, TDC made a cool RM146 million in a single day.

But wait a minute – how did TDC get credit facility for RM1 billion + to finance the purchase in the first place? Remember, we’re talking about a company here that 2 days ago, was not even creditworthy to the tune of a mere RM50 million guarantee to MCMC for its 3G licence.

Something stinks.

Telenor shareholders today heard a huge sucking sound to the tune of RM800 million from their company to TDC (RM650 million above cost price for the 3G licence, and RM150 million for its less-than-market price for its shares in Digi.com).

No fault of the Norwegians, it’s just that us Malaysians are getting pretty good at fleecing our foreign investors, to our long term detriment as an foreign investment destination.

good on you malek … i thought nobody cares or ignorant about the whole shit of this bail out thingy as i don’t see much comment here …

but then maybe all the readers are immuned to bail outs the “malaysian way” …

cheers …

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