Mercury Securities
  • Try MST28 trading from Mercury Securities with rates as low as 0.05%.
  • Earn MS Coin when you trade with MST28. Check out MST28.
  • Try MST28 trading from Mercury Securities with rates as low as 0.05%.
  • Get FREE real time quotes on our website & App. Check out MST28.
Open Trading Account
add free Download App
premium Premium Account

Last Price Change Volume
KLSE Market Watch
Open: Day Range: Prev Close:


DiGi.COM BERHAD (“DiGi” OR “COMPANY”)

DIGI.COM BERHAD

Type

Announcement
SubjectDiGi.COM BERHAD (“DiGi” OR “COMPANY”)

Contents :

HEADS OF AGREEMENT (HOA) IN RELATION TO THE PROPOSED ALLIANCE BETWEEN DiGi, DiGi TELECOMMUNICATIONS SDN BHD (“DiGi TELECOM”), A WHOLLY-OWNED SUBSIDIARY OF DiGi, TIME DOTCOM BERHAD (“TdC”) AND TT DOTCOM SDN BHD (“TDSB”), A WHOLLY-OWNED SUBSIDIARY OF TdC, (COLLECTIVELY THE “PARTIES”) WHICH INVOLVES:

  • THE PROPOSED JOINT BUSINESS PLANNING (THE DETAILS OF WHICH ARE SET OUT BELOW); AND
    • THE PROPOSED TRANSFER OR ASSIGNMENT OF THE SPECTRUM (AS DEFINED BELOW) FROM TdC AND/OR TDSB, TO DiGi TELECOM TO BE SETTLED VIA THE ISSUANCE OF 27,500,000 NEW ORDINARY SHARES OF RM0.10 EACH IN DiGi (“DiGi SHARES”)

    (COLLECTIVELY REFERRED TO AS THE “PROPOSED ALLIANCE”)


    1. INTRODUCTION
        CIMB Investment Bank Berhad (“CIMB”) wishes to announce on behalf of DiGi that on 13 November 2007, DiGi extended an offer to TdC to enter into the HOA for the Proposed Alliance (“Offer”). The Offer is valid for a period of fourteen (14) days from the date of the Offer within which the Parties are to execute the HOA should TdC accept the Offer.

        The Proposed Alliance comprises the following initiatives agreed to be undertaken by the Parties:
        (i) Proposed joint business planning exercise (“Proposed Joint Business Planning”) involving inter alia the following:
            (a) DiGi Telecom undertaking a review of the international and domestic fibre leases and contracts with TdC as one of its main suppliers and, where coverage, quality and cost are satisfactory, negotiate the utilisation of the same such that the contract volume is between RM10 million to RM15 million per annum for a period of three (3) years which may be extended on mutually acceptable terms;
            (b) DiGi Telecom exploring the sharing of towers with TdC for the purposes of TdC’s wireless broadband service in the 2.5GHz spectrum band (“WiMax”) or such other services as may be agreed, subject to mutually agreeable commercial agreements;
            (c) the Parties exploring the joint development of a Fixed Mobile Solutions package for their respective customers, DiGi Telecom being a distributor of TdC’s WiMax services and other mutual distribution arrangements, subject to terms and conditions to be agreed upon;
            (d) training by DiGi Telecom to TdC and TDSB key personnel on WiMax-related matters and such other areas to be agreed upon; and selective executive swaps and cross-training initiatives between the Parties; and

            (e) to conduct a joint study into areas of mutual cooperation between TdC and DiGi Telecom or its related companies; and
        (ii) Proposed assignment or transfer of the Spectrum Assignment No. SA/01/2006 over the frequency bands of 1965MHz-1980MHz, 2155MHz-2170MHz and 2010MHz-2015MHz (“Spectrum”) until 1 April 2018 with full benefits and rights attached thereto by the Minister of Energy, Water and Communications and/or the Malaysian Communications and Multimedia Commission (“MCMC”) or any other relevant authority to DiGi Telecom to be satisfied entirely by the issue of 27,500,000 new DiGi Shares (“Consideration Shares”) credited as fully paid-up to TdC adjusted for capital reductions, bonus issues, rights issues, capital repayments and/or stock dividends but excluding all payments of dividends in cash (“Proposed Assignment of Spectrum”).
            Based on the five (5)-day volume weighted average market price of DiGi Shares (adjusted for special gross dividend of RM1.00 per share) up to and including 9 November 2007, being the full market day immediately prior to the date the Offer was extended to TdC, of RM23.80 per share, the Consideration Shares to be issued have a value of RM654.5 million.

        The Proposed Joint Business Planning is conditional upon the completion of the Proposed Assignment of Spectrum.
        The Proposed Joint Business Planning and Proposed Assignment of Spectrum are not legally binding between the Parties. The HOA will facilitate the Parties to work towards finalising the terms and conditions of the above arrangements and to execute a definitive agreement in relation to the Proposed Alliance (“Definitive Agreement”).


    2. RATIONALE FOR THE PROPOSED ALLIANCE

        The Proposed Alliance aims to allow the Parties to collaborate for the purposes of consolidating their respective strengths in the telecommunications market and to explore additional areas of cooperation with the objective of enhancing values of their respective businesses.

        DiGi believes that the assignment or transfer of the Spectrum to DiGi Telecom would further enhance the competitiveness of the DiGi Group in the long term by providing it with greater growth potential. The assignment or transfer of the Spectrum to DiGi Telecom would allow the DiGi Group to provide basic and exciting new innovative products and services in the most effective and efficient manner by using third generation of mobile phone standards and technology (“3G technologies”). The 3G technologies would allow DiGi to offer users a wider range of more advanced services while achieving greater network capacity.

        Further, in line with DiGi’s strategy and focus in providing high value added and innovative low cost services, the Parties are expected to benefit from the Proposed Joint Business Planning which will leverage on their respective networks hence providing the Parties with the ability to optimise their strategy in their respective broadband mobile businesses.

    3. OTHER SALIENT TERMS OF THE HOA

    The other salient terms of the HOA, inter alia, are as follows:
        (i) DiGi shall upon the completion of the Proposed Assignment of Spectrum, issue a guarantee to the MCMC in place of TDSB’s guarantee of RM50 million relating to the Spectrum and release TdC and TDSB of any liabilities with regards to the guarantee;

        (ii) DiGi and DiGi Telecom will pay for any fees, duties, levies, transfer or assignment charges, imposition or payments whatsoever which may be incurred, payable or otherwise imposed on any party for the assignment or transfer of the Spectrum;

        (iii) Save as otherwise expressly agreed in a definitive agreement to be entered into between the Parties, DiGi and DiGi Telecom will not be liable to TdC, TDSB or any other parties in any manner whatsoever for any monies and liabilities that TdC or TDSB has or to be incurred, committed or obliged to pay (including any fines or penalties imposed by the relevant authorities) for the building (i.e. roll-out) of the network and services offered by or to any third party in relation to and utilisation of the Spectrum;

        (iv) The Parties shall use their respective endeavours to procure that the Spectrum should be assigned and transferred free of all encumbrances whatsoever and free from any obligation imposed on TdC or TDSB by the regulatory authorities;

        (v) The Parties shall make the necessary application(s) to the relevant authorities as well as seek their respective shareholders’ approval, where relevant, for the assignment or transfer of the Spectrum and issuance of the Consideration Shares;

        (vi) The Parties shall not enter into any negotiations, contract or arrangement, whether in writing or otherwise, with any other party(ies) in relation to the assignment or transfer or dealings whatsoever with regard to the Spectrum during the subsistence or duration of the HOA or such other date(s) mutually agreed by the Parties;

        (vii) The Parties shall enter into the Definitive Agreement on or before seventy five (75) calendar days from the date of the HOA or any other extension(s) of time that may be agreed between the Parties in writing, failing which the HOA will cease to be in force; and

        (viii) The Proposed Joint Business Planning, Proposed Assignment of Spectrum and all paragraphs under Section 3 of this announcement (save for paragraphs (vi) and (vii)) are not legally binding between the Parties.

    4. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
        None of the Directors and/or major shareholders of DiGi and persons connected to them have any interest, direct or indirect, in the Proposed Alliance.


    5. ADVISER

    CIMB has been appointed as Adviser to DiGi for the Proposed Alliance.


    6. DOCUMENTS FOR INSPECTION
        The HOA is available for inspection at the registered office of the Company at Level 7, Setia 1, No. 15 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur during normal business hours from Mondays to Fridays (except for public holidays) for a period of sixty (60) calendar days from the date of this announcement.
    A detailed announcement on the Proposed Alliance will be made upon the Parties finalising the terms and conditions of the Proposed Alliance, including the execution of the Definitive Agreement.

    This announcement is dated 13 November 2007.


    Announcement Info

    Company NameDIGI.COM BERHAD  
    Stock Name DIGI    
    Date Announced13 Nov 2007  
    CategoryGeneral Announcement
    Reference NoMM-071113-39363





    Close