Time dotCom won’t sell any more DiGi shares

  • Business
  • Saturday, 17 Jan 2009

TIME Dotcom Bhd (TDC) has no intention to sell more of its Digi.com Bhd shares after the recent disposal of a 2.9% stake or 22.5 million shares for RM463.50mil, sources say.

“TDC will continue to hold a 7.1% equity stake or 55.25 million shares in DiGi,’’ one source says.

An analyst, in his report, says KWAP (Kumpulan Wang Persaraan), the civil servant’s pension fund, is among the buyers of TDC’s DiGi shares. It is learned that there are five local institutions that have bought the shares.

“Whoever the buyers may be, they have to be local and not foreign institutions,’’ the source says.

TDC chief executive officer Afzal Abdul Rahim is expected to present to the TDC board a business turnaround plan over the next few days after a Jan 12 board meeting was postponed.

He was appointed in October last year and had 100 days to submit to the board a business plan to turn the ailing company around.

When contacted, Afzal does not elaborate on the plan and merely says “the proceeds from the sale of the 2.7% equity stake cannot be used for anything else other than to repay the loans.’’

There is speculation that part of the proceeds will be used to turn the company around but Afzal says that is not going to be the case.

The sale of 22.5 million shares is necessary to cover a loan facility that TDC had undertaken when it purchased the DiGi shares.

After paying off its loans and based on its audited financial statements for the financial year ended Dec 31, 2007, the company’s net gearing would be reduced from 0.48 times to 0.25.

There is a lot happening at TDC since Afzal took charge.

Apart from the business plan that he has to come up, he is said to have instituted various changes, putting in place a “de-layering” exercise to streamline operations.

To bring down costs, various measures are in place, including moving to an office space in Glenmarie in Shah Alam from its current premises at Jalan Tun Razak in Kuala Lumpur.

It is learnt that Afzal’s business plan will focus on the basics, optimise the existing infrastructure that is virtually under-utilised, and exploit the opportunities available in the market place.

It will continue to focus on offering wholesale and international businesses, tap the small and medium enterprises market and push its products and services to corporates and the government.

It is also learnt that a voluntary separation scheme is in place and 10 senior management team members have left the company.

Megat Hisham Hassan is expected to be appointed the new chief operating officer very soon.

Megat was formerly general manager of Fibrecomm Sdn Bhd.

“What the company needs is a sense of focus. It needs to focus on three or four businesses instead of trying to do 11 million things at one go,” says the source.

“The turnaround is going to be tough and there are no quick fixes in sight.

“What is important is for the new team to re-build the organisation, tap the potential in the market place for its products and services and restore engineering pedigree.

“If they are able to do that and if their business plan gets approved, then TDC will eventually shape up, but for now the waiting game continues,’’ he adds.

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