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The rationale then for the privatisation


MAXIS Communications Bhd (MCB) may have been the last to offer services in the country compared with its counterparts Celcom (M) Bhd and DiGi.Com Bhd but this had not stopped it from carving a market leader position.

Shareholders in the company had been enjoying healthy returns since its listing in 2002.

So when major shareholder, tycoon T. Ananda Krishnan took the company private in mid-2007, buying out its shareholders at RM15.60 a share, many investors were caught off-guard.

However, public shareholders did get a “fair exit” and getting paid RM15.60, based on a forward price earnings of 15.6 times FY2008 earnings, they had little to complain about.

On a group basis, the company delivered commendable financials in 2008 with revenue increasing to RM10.5bil while operating profit before depreciation, interest and tax also trended upwards to RM4.85bil.

“I think shareholders got a fair deal then,” says an analyst with a local brokerage.

When MCB was listed in 2002, its shares were sold to retail investors at RM4.36 each, while to institutional investors it was sold at RM4.85 each.

The initial public offering exercise raised more than RM3bil in proceeds, making it one of the largest deals in corporate Malaysia.

Shares of the company before the privatisation was last traded at RM15.20 a piece.

The justification for the privatisation was simple enough.

The telco was going through an expansionary phase in two of its main markets at that time, namely India and Indonesia.

Both markets were good opportunities to grow the company but for that to happen, profits would have to be reinvested into these overseas ventures.

As a result, the company would be unable to pay generous dividends during the expansionary period, an undesirable trait for a public-listed outfit.

MCB also said that at that point it wanted to be more aggressive and felt that by going private, it would perform better.

The robust markets at that time required the company to respond fast on potential deals such as mergers and acquisitions, and not having to go through long shareholder approval processes for that purpose would make it easier for the company, a top official had said.

And so it has been more than two years since the exit of MCB, but now the market awaits eagerly the re-listing of Maxis Bhd , the Malaysian operations of MCB.

The MCB management had in 2007 said it would consider a relisting in three to five years when its earnings were more stable.

According to reports, a source close to Ananda had at that time also given assurance to former Prime Minister Tun Dr Mahathir Mohamad that Maxis would be relisted in three years.

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