Deutsche Telekom seen selling stake in Celcom soon

  • Business
  • Thursday, 23 Jan 2003

DEUTSCHE Telekom AG will sell its 8% stake in mobile operator Celcom (Malaysia) Bhd by March, according to a Celcom source.  

The sale will help the troubled German telecoms giant to cut debts of US$68bil while smoothening the way for Celcom's planned merger with Telekom Malaysia Bhd's cellular arm TM Cellular Sdn Bhd – a union which will create Malaysia's largest mobile group. 

Telekom and Celcom are in the last lap of a takeover deal that has been hampered by disputes over pricing. 

Some key Celcom investors such as former chairman Tan Sri Tajudin Ramli and Deutsche Telekom have voiced opposition to the planned merger, sparking talk of a showdown when shareholders vote on the deal in March. 

But problems at home may pressure Deutsche Telekom into giving up, while a recent stake sale by a firm linked to Tajudin also signalled capitulation, the Celcom source said. 

The source expects Deutsche Telekom to accept Telekom’s takeover offer of RM2.75 per Celcom share, which would raise RM413mil for the German telco. 

“There won’t be any showdown. The recent sale by Beringin Murni has left Deutsche Telekom without any main ally. It will be outvoted by the other shareholders who want the merger,” the source added. 

Deutsche Telekom, which was invited by Tajudin to be Celcom’s strategic partner in 1996, has been gradually trimming its initial 20% stake. 

Beringin Murni Sdn Bhd, a privately-held company run by associates of Tajudin, sold its 8% Celcom stake last month for RM347mil. 

Deutsche Telekom and Tajudin could not be reached for comment yesterday. 

Analysts expect other big Celcom shareholders, such as the Employees’ Provident Fund and Tabung Haji, to vote in favour of the planned merger with TM Cellular.  

The analysts see Telekom's ability to fund Celcom's expansion as an attraction for those shareholders. – Reuters  

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