Axiata strives to raise our shareholder value by striking a balance between
short-term profitability and long-term growth.
| Type | Announcement |
| Subject | TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) RELATED PARTY TRANSACTIONS |
| Description |
LETTER OF AWARD FOR THE PROVISION OF 4G MULTI-OPERATOR CORE NETWORK FROM TELEKOM MALAYSIA BERHAD (RELATED PARTY TRANSACTION) |
1.0 INTRODUCTION
Axiata Group Berhad is pleased to announce that its wholly-owned subsidiary, Celcom Axiata Berhad (“Celcom”) had today accepted the letter of award dated 15 February 2019 on 4G Multi-Operator Core Network (“MOCN”) from Telekom Malaysia Berhad (“TM”), a related party, for the provision of the 4G MOCN for TM’s subsidiary, webe digital Sdn Bhd (“webe”) (“4G MOCN Award”).
2.0 SCOPE OF THE 4G MOCN AWARD
Celcom shall provide the 2G Domestic Roaming (“DR”) and/or 3G DR and/or 4G DR and/or 4G MOCN services and facilities (“Services”) for webe for a period of 3 years,
where the value of the 4G MOCN Award shall be determined through usage and at the rates as contained in the 4G MOCN Award.
.
The 4G MOCN is an alternative network sharing technology which complements the existing DR services arrangement provided by Celcom through 2G and/or 3G DR Services and 2G and/or 3G DR Facilities Agreement dated 28 January 2016. The 4G DR and/or 4G MOCN will further improve the network coverage of webe.
3.0 RATIONALE FOR THE 4G MOCN AWARD
The 4G MOCN Award will enable Celcom to enhance the current collaboration by offering a complete (2G/3G/4G) wholesale services to webe. In return, this will accelerate webe’s ongoing effort of a continuous and rigorous roll-out of its Long-Term Evolution (“LTE”) services nationwide leveraging on Celcom’s high quality network and wide coverage.
In addition, this will also support the Government’s aspiration to expand the broadband coverage and reachability to the general population.
4.0 BRIEF INFORMATION ON PARTIES
TM, a public listed company duly incorporated in Malaysia on 12 October 1984, has issued shares of 3,757,935,749 comprising 3,757,934,823 ordinary shares, 1 Special Rights Redeemable Preference Share and 925 Class D Non-Convertible Redeemable Preference Shares. The principal activity of TM is the establishment, maintenance and provision of telecommunication and related services.
4.2 webe
webe was incorporated in Malaysia on 11 February 2002 as a private limited company under the name of MIB Comm Sdn Bhd and changed its name to Packet One Networks (Malaysia) Sdn Bhd on 24 January 2007. It subsequently assumed its present name on 29 April 2016. webe has issued shares of 27,505,791 ordinary shares held by Mobikom Sdn Bhd (72.85%), a wholly-owned subsidiary of TM, Packet One Sdn Bhd, a wholly-owned subsidiary of Green Packet Berhad (18.91%) and SK Telecom Co. Ltd. (8.24%). The principal activity of webe is the provision of last mile broadband network infrastructure facilities and services.
4.3 Celcom
Celcom, a public company duly incorporated in Malaysia on 5 January 1988, has issued shares of 1,237,534,681 comprising 1,237,534,681 ordinary shares. Celcom was the first privately owned company in Malaysia to offer mobile services when it launched its “Art 900” analogue mobile system in 1989. In 1995, Celcom was one of the first operators in Malaysia to provide digital services through its GSM 900 network and subsequently launched its 3G and 4G services in 2005 and 2013 respectively. Celcom currently operates 2G, 3G and 4G LTE and provides mobile telecommunication services in Malaysia under the brand name ‘Celcom’.
5.0 EFFECTS OF THE 4G MOCN AWARD ON THE SHARE CAPITAL, EARNINGS AND NET ASSETS
The 4G MOCN Award does not have any effect on the issued and paid-up share capital of Axiata and is not expected to have any material effect on the earnings and net assets of Axiata Group for the financial year ending 31 December 2019. However, the 4G MOCN Award is expected to contribute positively to the future earnings of Axiata Group.
6.0 APPROVALS REQUIRED
The 4G MOCN Award is not subject to shareholders or any government authorities’ approval. Axiata will procure its shareholders’ approval for a mandate for the recurrent related party transactions under the 4G MOCN Award at the next annual general meeting pursuant to Paragraph 10.09 (2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
7.0 DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS’ INTEREST
Khazanah Nasional Berhad (“Khazanah”), a major shareholder of Axiata is deemed to have an interest in the 4G MOCN Award by virtue of Khazanah also being a major shareholder of TM. As of 21 February 2019, Khazanah holds approximately 37.16% and 26.21% in Axiata and TM respectively. By virtue of the above relationship, Khazanah is deemed interested in the 4G MOCN Award.
Tengku Dato’ Sri Azmil Zahruddin Raja Abdul Aziz who is a full time executive of Khazanah is Khazanah’s representative on Axiata Board (“Interested Director”) and accordingly, he has abstained and will continue to abstain from all deliberations and voting in relation to the 4G MOCN Award.
Save as disclosed above, none of the other major shareholders and/or Directors of Axiata and/or persons connected to them have any direct or indirect interest in the 4G MOCN Award.
8.0 AUDIT COMMITTEE AND BOARD OF DIRECTORS’ STATEMENT
The Board Audit Committee of Axiata, having considered all aspects of the 4G MOCN Award is of the view that the 4G MOCN Award will be undertaken on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the interest of the minority shareholders of Axiata.
The Board of Axiata (save for the Interested Director) after having considered all aspects, is of the opinion that the 4G MOCN Award is in the best interest of Axiata.
9.0 TRANSACTION WITH THE SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS
Save for the 4G MOCN Award and recurrent related party transactions of revenue and trading nature, there were no other transactions entered into between the Company with the same related party for the 12 months preceding the date of this announcement.
This announcement is dated 21 February 2019.
| Company Name | AXIATA GROUP BERHAD |
| Stock Name | AXIATA |
| Date Announced | 21 Feb 2019 |
| Category | General Announcement for PLC |
| Reference Number | GA1-21022019-00080 |