TELEKOM MALAYSIA TO BENEFIT FROM LOW INTEREST COST WITH USD150 MILLION SYNDICATED TERM LOAN FACILITY

Kuala Lumpur, Monday, 6 December 2004 - Telekom Malaysia Berhad today signed a Term Loan Facility of USD150 million and the proceeds from the Facility will be used to refinance its existing term loan facility that the Company undertook four years ago. More importantly, the new financing will allow Telekom Malaysia to establish a new price benchmark for itself in the international market particularly after its recent 2-notch credit upgrade of its foreign currency rating by Moody's from Baa2 to A3. The credit upgrade reflects the strong financial profile of Telekom Malaysia and its leading position in the telecommunications industry. As a result of its strong credit standing, Telekom Malaysia was able to obtain financing at far better terms than other similar companies in the region.

The 2.5 year Term Loan Facility was provided by a consortium of three relationship banks comprising The Bank of Tokyo-Mitsubishi, Ltd., Labuan Branch, Mizuho Corporate Bank, Ltd., Labuan Branch and National Australia Bank Limited, Labuan Branch.

The signing of the Facility is part of Telekom Malaysia's liability management strategy to actively manage its debt portfolio on an ongoing basis with the objective to maximise cost savings. As the Facility is intended to refinance Telekom' Malaysias existing loan, it will not increase the Company's overall gearing position. In fact, the Company has been actively reducing its overall gearing position through surplus cashflow derived from operations and investments. The new Facility will have a positive impact on Telekom Malaysia's current strong cashflow position, as it will enable the Company to achieve significant cost savings in interest expense based on a very competitive level of interest payable under the new Facility.

Signing on behalf of Telekom Malaysia was its Group Chief Financial Officer, Jaffa Sany Ariffin.

Speaking at the signing ceremony, Jaffa Sany Ariffin, said : "We are pleased that the financial markets have recognised and acknowledged the financial strengths and cashflow potential of Telekom Malaysia as reflected in the strong credit rating and in the competitive financing facility that our relationship banks have provided us. This financing facility will enable Telekom Malaysia to enjoy good interest saving which will further help to strengthen the financial performance of the Company."

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