Telekom Malaysia Bhd will raise up to RM4bil via a bond issue to fund its takeover of mobile network operator Celcom Malaysia Bhd, according to primary markets and debt markets newspaper BasisPoint.
The bond issue will replace the RM4bil bridging loan that Telekom is believed to have put in place for its Celcom offer, according to the BasisPoint report.
About RM3.75bil to RM4bil would be raised via Islamic and conventional instruments, it said.
Telekom had struck a deal with Celcom in October last year to create Malaysias largest mobile group. The countrys dominant telco agreed to sell its mobile arm TM Cellular Sdn Bhd to Celcom in return for new Celcom shares worth RM1.68bil.
The Telekom-Celcom union, expected to capture at least 40% of the local markets 8.6 million customers, is likely to be completed by March.
In another development, a Celcom statement said its senior executives would be meeting Deutsche Telekom AG officials to discuss the latter companys objection to the planned deal with Telekom.
Deutsche Telekom, Europes biggest phone company, holds an 8% stake in Celcom, and is said to hold the view that Celcom needs its consent to buy TM Cellular and combine their services.
Celcom said the two sides would try to resolve differences at a meeting. It said it was committed to resolving the differences with Deutsche Telekom promptly and amicably.
Joerg Andreas Boy, Deutsche Telekoms representative on Celcoms board, declined to comment.
Celcom shares, which had gained some 18% in the past 12 months, closed 4 sen lower at RM2.51 yesterday. Agencies