KUALA LUMPUR (Dec 11): Singapore Technologies Telemedia Pte Ltd (ST Telemedia) said financial instruments will form part of its sale of "a majority stake" in U Mobile Sdn Bhd to a company owned by tycoon Tan Sri Vincent Tan Chee Yioun and Johor princess Tunku Tun Aminah Sultan Ibrahim.
"As part of supporting U Mobile’s growth, ST Telemedia has, from time to time, provided funding to the company in the form of certain financial instruments.
"These financial instruments will also form part of the sale to the purchaser once certain conditions precedent to the completion of the sale are satisfied, including the receipt of relevant regulatory approvals," said ST Telemedia, which is owned by Singapore state investor Temasek Holdings Pte Ltd, in a statement on Wednesday.
ST Telemedia said it has been a strategic shareholder of U Mobile since March 2010, and that it currently holds 49% of U Mobile's issued ordinary share capital via its wholly owned Straits Mobile Investment Pte Ltd, "consistent with U Mobile's disclosure with the Companies Commission of Malaysia (SSM)".
On Dec 4, ST Telemedia had announced it would be selling "a majority stake" to Mawar Setia Sdn Bhd, a company incorporated in April this year in which Tan owns 70% and Tun Aminah holds 30%, based on information retrieved from SSM. Tun Aminah is the only daughter of Malaysia's King, Sultan Ibrahim. It had also said that once the deal is completed, it would be left with a minority stake of about 20% in U Mobile, and that U mobile would cease to be its subsidiary.
This had caused confusion about ST Telemedia's effective stake in U Mobile, as a majority stake is typically defined as at least 50% plus one share. Foreign shareholding in telecommunications companies in Malaysia is regulatorily capped at 49%.
Over the weekend, The Edge reported that a spokesperson from ST Telemedia had confirmed that Mawar Setia would eventually own 51% in U Mobile upon completion of the share purchase agreement.
The weekly also wrote, citing sources, that ST Telemedia might have a “majority stake” in U Mobile, possibly up to 71%, considering the sizeable convertible bond holdings ST Telemedia held on U Mobile.
When asked about its choice of words in the Dec 4 statement — specifically whether it had more than 50% stake in U Mobile, the spokesperson from ST Telemedia admitted that the company holds “certain instruments” that could be exchanged into ordinary shares in U Mobile.
The spokesperson also did not reveal the transaction price of its deal with Mawar Setia, citing confidentiality.
ST Telemedia invested into U Mobile with a 33% stake in March 2010, when it only had about one million subscribers and increased its stake to just under 49% in June 2012.
Sultan Ibrahim, who was sworn in as King of Malaysia on Jan 31 this year, bought a 10% stake in U Mobile in 2014 before raising it to 15% in 2015. He currently owns a 22.3% stake in U Mobile.