PETALING JAYA: Intel Capital, which invested in convertible bonds issued by GREEN PACKET BHD in 2008, has filed a suit seeking RM60mil from the telecommunications company.
In an announcement yesterday, Green Packet disclosed that it had to make changes to its contingent liabilities in its books for the financial year ended Sept 30, 2013 because of a suit served on it by Intel on Sept 27 last year.
The amount set aside is not known.
Intel claimed that the company did not fulfil its obligations under a put option and tag-along rights agreement (POTA) that was executed in July 2010.
Under the POTA, Green Packet is to acquire all of Packet One Networks (M) Sdn Bhd (P1) Class B irredeemable convertible preference shares of RM0.10 each (Class B ICPS) if Intel exercised its right to exchange the RM50mil guaranteed redeemable convertible exchangeable bonds (GCEB).
The GCEB are to be exchanged into Class B ICPS that Green Packet is to purchase for RM60mil.
On Nov 26, 2012, Intel exercised its option to convert the bonds into Class B ICPS shares. It ended up with 200,000 preference shares.
Subsequently, Intel exercised its right under the POTA requiring Green Packet to purchase the 200,000 preference shares.
Green Packet contended that it had obtained legal advice and was advised that Intel’s exercise of the POTA was flawed and that the terms and conditions of the POTA may not be valid.
The company told Bursa Malaysia that it had challenged Intel’s exercise of its right under the POTA which it claimed was null and void.
Green Packet stated that although the company was negotiating with Intel on a settlement structure for the POTA, the American chip manufacturer had initiated a legal suit against the company.
The court has set April 1 this year for decision.
When contacted, Green Packet chief executive officer C.C. Puan said he was confident the matter with Intel would be amicably settled out of court.
It has also been speculated that Green Packet’s P1 was inching closer to a strategic merger and acquisition deal with either Digi.com Bhd or TELEKOM MALAYSIA BHD. Insiders said if that deal were to materialise soon, then the obligation to Intel would be settled.
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