ST Telemedia said it has provided funding to U Mobile from time to time in the form of “certain financial instruments” and they will form part of the sale. — Reuters
Singapore: A Temasek Holdings Pte firm’s stake sale agreement values U Mobile Sdn Bhd at about RM7.5bil or about US$1.7bil, according to people familiar with the matter, after the Malaysian phone company won a major 5G contract.
Straits Mobile Investments Pte, a subsidiary of Singapore Technologies Telemedia Pte (ST Telemedia), which is wholly owned by Singapore state investor Temasek, is cutting its holdings after Prime Minister Anwar Ibrahim’s government picked U Mobile last month to build Malaysia’s second 5G network.
The purchaser, a company owned by the tycoon Vincent Tan and the Malaysian king’s daughter, negotiated for payment to be deferred for up to about a year, the people said, asking not to be identified because the information is private.
U Mobile’s selection to develop the network surprised analysts because it’s a smaller player in Malaysia’s telecommunications industry and has a large foreign ownership.
It also counts Malaysia’s monarch, Sultan Ibrahim Iskandar of Johor, among its shareholders.
When ST Telemedia announced the transaction last week, it said Straits Mobile was selling a “majority stake” in ST Telemedia’s “subsidiary” U Mobile and would own about 20% of the company after the sale.
The announcement drew scrutiny in local media because Malaysia has a 49% cap on foreign ownership in telcos.
In a statement Wednesday, ST Telemedia said it has provided funding to U Mobile from time to time in the form of “certain financial instruments” and they will form part of the sale.
ST Telemedia owns 49% of ordinary shares, consistent with U Mobile’s disclosures to the Companies Commission of Malaysia, it added.
Communications Minister Fahmi Fadzil told lawmakers on Nov 7 that U Mobile hadn’t breached rules on foreign shareholdings.
A representative for Temasek referred a request for comment to ST Telemedia.
Spokespeople for ST Telemedia and the Malaysian Communications and Multimedia Commission declined to comment. Malaysia’s national palace and Tan didn’t respond to requests for comment.
ST Telemedia is selling the shares to Mawar Setia Sdn Bhd, a company that’s 70% owned by Tan, the chairman of U Mobile, according to a filing.
Princess Aminah Ibrahim of Johor, the only daughter of Sultan Ibrahim, holds the remaining 30%.
ST Telemedia said in its Dec 4 statement that the stake sale is expected to be completed no later than the third quarter of 2025.
U Mobile has said it will fund the 5G network rollout on its own, without any cost to Malaysian taxpayers. Earlier this year, Tan said the company was rejecting a buyout offer from a bigger competitor, Maxis Bhd
.
Other local telecommunications companies such as CelcomDigi Bhd and Telekom Malaysia Bhd may be invited to buy stakes in U Mobile at some point, the people said. U Mobile said in its statement that it wasn’t aware of any discussions.
ST Telemedia announced in 2010 that it had agreed to buy a 33% stake in U Mobile. That cost RM625mil, a Malaysian business newspaper later reported, valuing U Mobile at about RM1.9bil then.
The current valuation based on the latest share sale agreement is almost four times that. — Bloomberg
