Last Friday, four telcos signed their conditional share subscription agreements (SSA) with Digital Nasional Berhad, allowing them to take a combined 65% stake in the 5G single wholesale network. After announcing its equity investment, Celcom’s parent company, Axiata Group Berhad’s share prices slumped by 13 sen to RM2.52, the lowest in over 12 years. The last time Axiata shares traded below RM2.60 was in July 2009.
According to The Edge, other telcos have also seen slight declines in their share prices with Digi declining slightly by two sen to RM3.43 per share. Meanwhile, Maxis which has decided not to proceed with the equity deal also recorded a decline of 7 sen to RM3.46 this morning. Telekom Malaysia which closed at RM5.18 per share on Friday has risen slightly to RM5.25 today.
To recap, both Telekom Malaysia and YTL Communications will be taking a 20% stake in DNB valued at RM285.7million. Meanwhile, Celcom and Digi will both take a 12.5% stake each, valued at RM178.6 million. The government through the Ministry of Finance will hold the remaining 35% stake and a Golden Share. According to DNB, the Golden Share will grant the government various rights and privileges and covers areas such as ownership, sale, or transfer of shares on the part of the Government.
On Sunday, Finance Minister Tengku Zafrul claimed that all six telcos have signed access agreements with DNB and more Malaysians can expect to enjoy 5G services soon. At the time of writing, DNB and the three publicly listed telcos (Celcom, Digi and Telekom Malaysia) have only announced the signing of the share subscription agreement (SSA). According to the announcements by the telcos, the SSA is conditional and is subject to conditions that need to be fulfilled by 30th October 2022. The execution of the Access Agreement (AA) to allow wholesale 5G services nationwide are among the listed conditions in the deal.
Some analysts expected that the signing of the equity deal may boost investor confidence. The telco sector has been badly hit partly due to the uncertainty of the 5G rollout. Back in May, it was reported that Maxis, Digi, Axiata and TM have lost RM26 billion in value. Among the four telcos, only TM has bucked the trend since May while the share prices for the other three telcos have continued to slide downwards.
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