TM GETS SHAREHOLDERS’ NOD ON DEMERGER EXERCISE AND LISTING OF TMI

Telekom Malaysia Berhad (TM) is pleased to announce that it has obtained shareholders’ approval for the Demerger exercise undertaken by the Group at an Extraordinary General Meeting (EGM) held today at TM’s headquarters, Menara TM.

The shareholders also voted in favour of all other resolutions presented at the EGM.

At a press conference held after the meeting, Tan Sri Dato’ Ir. Md. Radzi Mansor, Chairman, TM said: “We are pleased that the shareholders have approved all the resolutions. In particular, the approval for the Demerger paves the way towards the successful completion of the Demerger exercise by 2Q this year. We are glad that our shareholders share our views on the upside of the Demerger and are excited to see the creation of two listed communication providers in Malaysia, with distinct aspirations and strategies. We believe that this will result in significant operational and strategic benefits to both TM (FixedCo) and TM International Berhad (RegionCo) moving forward. Their approval is an endorsement of the Group’s transformation efforts.”

He also added, “Post Demerger, TM will be a leading next generation communications provider in Malaysia with broadband growth potential while TMI will be a regional mobile operator with a unique portfolio of assets most of which are in the fast growing markets across Asia.”

Other key resolutions presented at the EGM include the listing of TM International Berhad (TMI) on the Main Board of Bursa Malaysia Securities Berhad, shareholders’ mandate for the issuance of up to 10% of TMI’s issued and paid-up share capital, Employees’ Share Option Scheme (ESOS) for eligible employees, the acquisition of Khazanah Nasional Berhad’s interests in Sunshare Investments Ltd (“SunShare”) and PT Excelcomindo Pratama Tbk (“XL”) by TMI and Indocel Holding Sdn Bhd (TMI's wholly owned subsidiary) as well as the exemption for Khazanah from the obligation to carry out a mandatory general offer on TMI.

TMI is targeted to be listed on the Main Board in 2Q 2008 and the shareholders have given the Board the mandate to issue up to 10% of TMI’s issued and paid-up share capital for flexibility in the event TMI requires capital as and when needed. The shareholders also agreed to allow Employees Provident Fund (EPF), a substantial shareholder of TM to participate in the issuance of new TMI shares, signifying its long term trust and confidence to TMI.

Dato’ Sri Abdul Wahid Omar, Group Chief Executive Officer, TM said: “The listing will provide TMI with independent access to the capital markets, hence greater freedom to pursue its investment strategies. With the listing and its strong presence in 10 key Asian markets, TMI is on track to realise its aspirations to be a leading mobile operator in South and Southeast Asia.”

The shareholders also voted in favour of establishing an ESOS for eligible employees of TM. “The scheme serves to align the interest of the employees with that of the shareholders and presents an opportunity for the employees to participate in the Company’s growth besides serving as an appreciation for their contribution, dedication, determination and commitment towards building the Company domestically and regionally,” explained Dato’ Sri Wahid.

TMI will increase its equity stakes in M1 and XL respectively with the approval from the shareholders for the acquisition of Khazanah Nasional Berhad's 49% interest in SunShare and 16.81% interest in XL by TMI and Indocel for a purchase consideration of RM1,580 million to be satisfied by the issuance of 176 million new TMI shares to Khazanah. This would enable TMI to enhance its earnings as well growth profile in the long term.

In addition, Khazanah will be exempted from having to undertake a mandatory general offer on TMI as a result from the share considerations received from TMI. Such general offer could result in the privatisation of TMI which is not in line with the objectives of the Demerger exercise.

“We have achieved significant progress in the Demerger exercise and are pleased with the vote of confidence from our shareholders today. We believe that the Demerger has created value and will further result in substantial value creation to our current shareholders,” concluded Dato Sri Abdul Wahid.

For further information on TM, visit www.tm.com.my