Saturday, 26 November 2011

TdC to grow business after completing acquisitions

TdC to grow business after completing acquisitions SUBANG JAYA: Time dotCom Bhd (TdC) can take its data travel and warehousing business further now that it has shareholder approval for the proposed acquisition of a group of telecommunication companies — the AIMS Group, Global Transit Communications Sdn Bhd (GTC), Global Transit Ltd (GTL) and other Global Transit entities which hold Internet licences in Singapore and Hong Kong.

More than a year after the acquisition was first announced by the board of directors, the shareholders of TdC have finally given the nod for the multiple proposals. The acquisition is to be satisfied by the issuance of new TdC shares and cash totalling about RM322 million to the former shareholders of the acquired companies.

According to group CEO Afzal Abdul Rahim, the acquisition will give TdC access and the capability to serve a multi-billion dollar market — comprising the growing Indo-China, Asean and North Asia market, which has more than half of the world’s population where Internet connectivity is in high demand — through the 10% stake in the Unity Cable System held by GTL.

“We are in a business [that] is not dependent on just the domestic Malaysian market, but taking advantage of the huge data growth in Asia-Pacific. We see that this acquisition will bring us value in so far as continuing growth is concerned, not just within the shores of Malaysia but outside Malaysia, and that’s the biggest value that it brings to us in the long term,” he told a press conference after the company EGM yesterday.

The Unity Cable System is a trans-Pacific submarine communications cable system which connects Asia through Japan with the US on the other side of the Pacific Ocean. The cable is almost 10,000km long with a multi-terabyte capacity of up to 7.68Tbps. It was built in collaboration with Google Inc, Bharti Airtel, GTL, KDDI Corp, Pacnet and Singapore Telecommunications Ltd (SingTel).

Apart from the acquisitions, the group also proposed a capital repayment of RM50.6 million to its entitled shareholders and capital restructuring comprising capital reduction of the existing issued and paid up capital via the cancellation of 90 sen of the par value of each TdC share, the offsetting of TdC’s share premium account against the accumulated losses and share consolidation.

“We believe the combined business and growth potential from these acquisitions will bring long-term value for both our shareholders and customers. We will now work towards obtaining the required approvals to close the transactions. Thereafter, we will begin the process of integrating these companies to immediately realise the synergies and opportunities expected from this transaction,” said Ronnie Kok Lai Huat, senior independent non-executive director of TdC.

Through the acquisition of companies, TdC will emerge as an integrated, regional telecommunications player as the acquisition of AIMS brings the business of data warehousing and managing network neutral data centres in Asia, as well as data travel agent business through the acquisition of GTC.

Via the offsetting of its share premium account with the accumulated losses, the group will now be debt-free, according to Afzal. With a better reflected balance sheet, the group will still be looking for other possible investments in telecommunication companies in the region starting with Southeast Asia and the rest of the Asia-Pacific, as and when the opportunity comes up, Afzal said.

This article appeared in The Edge Financial Daily, November 23, 2011. ... g-acquisitions.html

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