TM’s equity stake in webe could potentially rise to 85.9 per cent

KUCHING: Telekom Malaysia Bhd’s (TM) equity stake in webe could potentially rise to 85.9 per cent from 72.9 per cent currently, from the group’s subscription of RM495 million nominal value of the third and final tranche issuance of webe’s convertible medium term note (CMTN) programme.

The research arm of AmInvestment Bank Bhd (AmInvestment) pointed out that the proceeds of this third tranche CMTN subscription would be utilised to fund the implementation of webe’s business plan.

“In total, we estimate that TM has issued RM1.6 billlion under this CMTN programme, which is within our FY17F capex/revenue assumption of 30 per cent,” it said.

With the conversion of the CMTN, the research team said, Green Packet’s stake in webe could drop from 13.2 per cent to 10.3 per cent and Korea’s SK Telecom Co. Ltd from 4.8 per cent to 3.8 per cent.

Of note, TM had acquired a 55 per cent equity stake in P1 (which has since been renamed to webe) for RM350 million cash back in 2014 as part of its plans to spearhead the group’s convergence strategy of offering unified solutions through the bundling of fixed, wireless and mobile broadband services.

“Hence, webe has been appointed the ‘Mobility Centre for Excellence’, which includes TMgo broadband services. Webe currently targets the urban population while TMgo’s focus has been on the rural segment. This forms TM’s convergence strategy in the delivery of end-to-end broadband and data services,” AmInvestment Bank noted.