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TMI Sees Strong Support At EGM - Marking A Major Milestone For The Group

2009-03-24

TMI Sees Strong Support at EGM - Marking a Major Milestone for the Group

TM International Berhad (TMI), announced today that shareholders approved all the resolutions proposed at the Group's Extraordinary General Meeting (EGM), which primarily relates to three key matters namely, the rights issue to raise equity, a change of name and a long term incentive scheme in the form of employee share options.

Rights Issue Towards a More Robust Capital Structure

On 26th Feb, TMI had announced its plan to raise RM5.25 billion via a fully renounceable Rights Issue. The primary objective of the capital raising is to delever TMI's balance sheet.

The rights offering, is a pro-active and prudent step from management, allaying investor concerns on capitalisation and any lingering balance sheet questions. It also brings the additional benefit of an annual interest saving of over RM200 million.

Remarking on the outcome, Dato' Sri Jamaludin Ibrahim, President and Group Chief executive Officer of TMI said “We are happy with the outcome. The Rights Issue allows shareholders to subscribe on a pre-emptive basis whilst benefiting TMI by further strengthening its balance sheet and capital structure. Based on feedback from investors, our high gearing was seen as an overhang on our share price. The Rights Issue will make TMI more flexible and agile financially, placing us on a firmer footing to weather the volatility of the current economic conditions”.

A Rights Issue was chosen as it is inclusive in nature and provides shareholders with the opportunity to participate in an equity raising exercise. As the Rights are fully renounceable, shareholders who prefer not to participate in the Proposed Rights Issue, can sell their rights entitlement for cash on Bursa Securities during the rights trading period enabling them to maintain shareholder value.

As previously communicated to shareholders, TMI intends to raise gross proceeds of approximately RM5.25 billion, which translates to RM1.40 per each of the 3,753.4 million existing TMI Shares.

In line with the above, TMI announced this morning that the pricing for the Rights Issue has been fixed at RM1.12 per share on a basis of 5 Rights Shares for every 4 existing TMI Shares held. This is equivalent to RM1.40 per existing TMI Share held if shareholders wish to take-up their entitlement under the Rights Issue (i.e. RM1.12 per share multiplied by 5 Rights Shares and then divided by 4 TMI Shares). The issue price represents a discount of 50.9% to the 5-day volume-weighted average market price up to 23 March 2009 of RM2.28. TMI is looking to announce the entitlement date for the Rights Issue shortly and complete the process by the second quarter of this year

Employee Share Options for Long Term Incentive

On the 10th of February 2009, it was announced that the Group would establish a long term employee share option scheme. The Option Scheme will serve to align employees' interest with that of shareholders. One of the unique features of the Option Scheme is that the grant and vesting of the options will be given to employees based on certain financial criteria in addition to each employee's individual performance. This will ensure that all options are financially justified, consistent with the Group's intention to enhance its performance management disciplines. The total number of new TMI shares to be issued over the life of the scheme (8 years) will not exceed 7% of the company's issued and paid up capital. The vesting for the first batch of grants will only take effect in 2011.

Change of Name Towards a New Beginning

TMI's change of name, to Axiata, is part of the demerger plan, towards building a new identity to reflect the Group's new vision, direction and strategy, transforming the Group from a holding company to a true multinational organisation with world class processes and people. The new brand will unite our subsidiaries and associate companies as being part of a unique family and regional leader. The new name will also help to avoid confusion between TM and TMI whilst allowing the Group to reinforce its new business philosophy. A rigorous process was undertaken before the final board decision on recommending the name Axiata. This included testing the name in key countries for cultural acceptance as well as the ability to register the new name in all TMI markets.

Strengthening the Fundamentals

“We are extremely pleased to have obtained the strong support from our shareholders today. The adoption of the resolutions at today's EGM paves the way towards TMI's long term strategic objectives and growth” TMI Chairman, Tan Sri Dato' Azman Hj. Mokhtar said. “With a more robust balance sheet, a performance based long term incentive scheme plan for employees and a new name and brand identity, the platform is now in place towards unlocking the potential of the Group towards sustainable shareholder value,” concluded Dato' Sri Jamaludin Ibrahim.

About TMI

TMI is one of the largest Asian telecommunication companies, focused in high growth low penetration emerging markets. TMI has a controlling interest in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India and Singapore. India and Indonesia are some of the fastest growing markets in the world. In addition, the Malaysian grown holding company has assets in telecommunication operations in Thailand, Pakistan and Iran. The Group's mobile subsidiaries and associates operate under the brand name ‘Celcom' in Malaysia, ‘XL' in Indonesia, ‘Dialog' in Sri Lanka, ‘AKTEL' in Bangladesh, ‘HELLO' in Cambodia, ‘Idea' and ‘Spice' in India, ‘M1' in Singapore and ‘MTCE' in Iran (Esfahan).