Telekom Malaysia sees Indonesian investment unchanged from Jakarta`s new ruling

Kuala Lumpur (Antara News) - Malaysia's largest telecommunications provider Telekom Malaysia does not expect the new ruling in Indonesia governing foreign ownership in telecom companies to affect its shareholding in PT Excelcomindo Pratama Tbk.

Telekom currently holds a 67 percent stake in Excelcomindo.

"Based on the report that has come out, the new ruling should not be applied (retroactively). (Thus,) it does not affect us," Telekom chief executive officer Abdul Wahab Omar was quoted by Thomson Financial as telling reporters Friday.

The Indonesian government issued a new presidential instruction on Wednesday that limits foreign ownership in cellular telecommunication companies to a maximum of 65 percent from 95 percent previously, and in fixed line phone companies, to a maximum of 49 percent.

Separately, Telekom said it has closed its exchange offer of 3 billion ringgit Islamic Stapled Income Securities for its existing conventional bonds, known as Tekad Mercu bonds, of the same amount.

Some 97.5 percent of the conventional bondholders accepted the exchange offer.

"As a result of the exchange offer, Telekom has converted 2.925 bilion ringgit of its existing debts to Shariah-compliant financing. The balance of 75 million ringgit Tekad Mercu (conventional) bonds has been purchased by Telekom and will be cancelled," the state-owned telecom company said.

With the conversion of the bonds, more than 4 billion ringgit of Telekom's borrowings are now based on Islamic principles.

"This amount represents about 95 percent of our domestic borrowings or one-third of our total group borrowings," Abdul Wahab said in a statement.

Telekom's group debt as at the end of the first quarter stood at 11.962 billion ringgit. (*)
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