PLUS takeover gets nod ...but not without some drama...

PETALING JAYA: PLUS Expressways Bhd received approval from its shareholders on a RM23bil takeover bid by major shareholders UEM Group and the Employees Provident Fund (EPF) despite a commotion followed by a walkout of minority shareholders.
A relatively big group of minority shareholders stormed out of an ongoing PLUS EGM yesterday claiming procedural irregularities, shouting their displeasure to those outside, which included members of the media.
The minority shareholders were shouting for a “boycott” of the “illegal” EGM while walking out from the hall.
PLUS' auxillary police were immediately seen at the doors of the hall following the walkout by shareholders in protest.
Senior independent non-executive director Tan Sri K. Ravindran, who chaired the EGM, denied there were procedural irregularities as claimed by minority shareholders.
“We did everything within the legal ambit of whatever we had to do,” he said.

PLUS minority shareholders staging a walkout after the first vote.

The toll operator has called for the EGM to table a takeover proposal from UEM-EPF for RM23bil, or RM4.60 per share.
The EGM, which lasted about four hours, was attended by some 800 people. The meeting took a short break after the “ruckus” and resumed shortly to vote for the remaining resolution. Institutional shareholders were present either physically or by proxies.
Amran Ariffin, 36, who has 45,000 PLUS shares, said the chairman of the EGM had refused to record a minority vote by a show of hands despite the fact that the deal would very likely go through on majority shareholder support.
“They don't even want to play fair. That is the contention right now. Even if that (show of hands) won't affect the final outcome, they don't even want to follow the procedure. That is embarrassing,” he told reporters.
“We were denied a moral victory. The chairman said 96% of the proxy voters have already voted in favour of the proposal so we couldn't have changed anything.”
He said PLUS had been paying shareholders a consistent level of dividends, and likened the takeover deal to a “forced marriage”.
Amran said the chairman had called for a show of hands to vote on a proposed takeover by UEM-EPF, but a demand for a poll vote from the floor cut the counting process short, which means there is no official tally of dissenting votes.
Ravindran acknowledged that there was a show of hands but had not disrupted the meeting. “There were two shareholders who wanted to have a poll instead. I am duty bound to acknowledge the shareholders.”
“We have to give the proper rights to all the shareholders who own the floor,” he added.
Ravindran wanted to clarify that acceptance of the offer should not be seen as selling off the company.
“The company is not for sale but when somebody makes an offer, we can't independently just keep it aside and say we don't know anything about it,” he said.
He stressed that the offer had only been endorsed by independent directors as a credible offer after advice from independent advisors, including AmInvestment Bank Bhd and Goldman Sachs.
PLUS' major shareholders UEM, its parent Khazanah, and EPF (who are also the offerors in the deal) are abstaining from voting at the EGM.
Khazanah, UEM and EPF hold a combined 67.7% stake. EPF holds a 12.3% stake in PLUS while UEM Group, together with its parent Khazanah, holds 55.4%.
Based on shareholding spread, some 1.55 billion shares, or 31% stake, are eligible to vote on the takeover offer by UEM-EPF. However, only 1.06 billion or 21% of the total PLUS shares voted at the meeting. Of the 21%, 99% were for the deal.
“We are targeting for the payment to the entitled shareholders in early September and delisting (on Bursa Malaysia) by end-September,” PLUS chairman Tan Sri Mohd Sheriff Mohd Kassim said.
“We are quite confident that we have followed the correct procedures,” he said, when asked to comment after some disgruntled shareholders walked out of the EGM.
Minority Shareholder Watchdog Group (MSWG) CEO Rita Benoy Bushon said that during the EGM, the minority shareholders requested that the voting be carried out by show of hands and the board agreed to this request even though there was already a request for a poll vote by two shareholders.
The request for the poll vote was then withdrawn by the said shareholders. Subsequently, when the process of counting of votes by show of hands for the resolution on the proposed disposal was in progress, another two shareholders requested for voting by poll.
“The observation by MSWG was that the voting by hands was not in favour of the proposed disposal,” she said.
Rita said the chairman of the meeting acknowledged the request for a subsequent poll vote, resulting in the minority shareholders expressing their displeasure on the non-completion of the counting of votes by hands and staged a walk-out.
“The chairman explained that his acknowledgment for such a poll request was in accordance with the Memorandum and Articles of Association of the company.
“The resolution on the proposed disposal was carried by way of poll with 99% voting for the resolution,” she said.

First published in The Star on February 24, 2011

MAIDEN DIVIDEND FROM AXIATA

Axiata Group has rewarded shareholders with a handsome divident of 10 sen per share sooner rather than later.
This is its maiden dividend after its separation from big bro Telekom Malaysia Bhd in early 2008.

Axiata said today it made RM1.77bil net profit for financial year ended Dec 31, 2010 versus RM1.65bil reported a year earlier.
Revenue rose to RM15.6bil from RM13.3bil but EPS was down 1 sen from 22 to 21 sen in 2010.
For the fourth quarter it took a hit in impairment for its Indian operations, Idea Cellular which led to a net loss of RM367mil compared to RM558mil net profit in 2009.

It explains why the impariment: 

"Non normalised PATAMI rose by 7%, to reach RM1.8 billion, due to the non cash FRS

impairment accounting adjustment on Idea of RM1 billion. Without the impairment, PATAMI

growth would have been 73%.

Idea represents an important strategic stake for Axiata, in a huge market which is growing

rapidly and the Group has always taken a long term view on the investment. The decision to

impair is based on conservative accounting standards, and in conjunction with the

impairment assessment requirement under FRS 136 “impairment of assets”. The possibility

of an Idea impairment has been consistently communicated to market.

The decision therefore, does not reflect Idea’s performance. Against hyper competition and

an uncertain regulatory environment, Idea is well recognized as one of the best performing

operators in India. It is now number 3, in terms of revenue market share, from number 5

three years ago. The Indian market, with a population of 1.2 billion, has tremendous growth

opportunity in voice given its relatively low penetration, and at a later stage, data services

.Axiata remains committed to Idea and has every faith in its long term value.''

Deal approved amid drama at PLUS EGM

Petaling Jaya: PLUS Expressways Bhd's minority shareholder walked out from an ongoing EGM at around 12.30pm.

Disgruntled shareholders marched out from the hall exclaiming the EGM to be illegal and called for a boycott of the meeting.
The board of directors have just stepped out from the hall for a short break after three hours into the meeting.
The meeting will resume after the short break. It is understood that only one resolution has been voted for at the moment.
PLUS has called for the EGM to table a takeover proposal from UEM Group and the Employees Provident Fund for RM23bil, or RM4.60 per share.
PLUS' major shareholders, who are also the offerors in the deal, UEM, its parent Khazanah, and EPF are abstaining from voting at the EGM.
Khazanah, UEM and EPF hold a combined 67.7%. EPF holds a 12.3% stake in PLUS while UEM Group, together with its parent Khazanah, holds 55.4% of the firm.
First published in The Star on February 23, 2011

TM goes back to Celcom for the cellular touch

TM poised to return to cellular business

Telekom Malaysia Bhd (TM) and Celcom Axiata Bhd may potentially be entering into a 10-year collaboration that allows TM to get back into the cellular business it once sold off but now needs mobility solutions to bridge the gap in its current product offering.
For Celcom, the collaboration allows it access to a high-speed broadband (HSBB) network. Its foray into the fibre business gives it exposure to millions of homes and offices to push rich multimedia services such as IPTV and video on demand and stay in competition with rival Maxis Bhd which aspires to become an integrated player.
The partnership may be a game changer in the way Celcom and TM operate in the future. Each will have a platform that they need to push multimedia, fixed and mobile solutions to users.
“We will not become a full-blown cellular player as our focus is our fixed-line business. (But we will opt for the) mobile virtual network operator (MVNO) model as it allows us to get into the cellular business that we can monetise on,'' TM group CEO Datuk Seri Zamzamzairani Mohd Isa said.
TM in a statement said it would opt for the MVNO model to offer its own brand of mobile voice and data services to complement its existing fixed-line portfolio.
Zamzamzairani said they (TM and Celcom) could either offer services jointly or individually.
This TM/Celcom partnership also means Maxis may have more competitors on hand than it had hoped for. Hopefully, the consumer will be the big winners in terms of choices. And with more players competition should drive rates down and, perhaps, improve the quality of services and offerings.
Yesterday, both Celcom and TM inked a memorandum of understanding (MoU) to cooperate on several areas and gave themselves two months to hammer out a definitive collaborative agreement.
Celcom was once upon a time a unit of TM but, after the demerger, it was hived off to Axiata Group.
Asked if it was a mistake to demerge with Celcom years ago since it now needed to also offer cellular services to its users, Zamzamzairani said “it was a shareholder issue and not management.''
This MoU signing came just over a month after Maxis inked a deal to use TM's HSBB for a 10-year period. The sharing of resources will save the country millions in infrastructure build-up but both Celcom and TM could not give any estimates of how much they would save in infrastructure sharing.
“It is in the best interest of the telecoms industry, especially the service providers, to progress towards network infrastructure sharing to minimise capital expenditure. It does not make sense for the industry to duplicate infrastructure,'' Information, Communications and Culture Deputy Minister Datuk Joseph Salang said after witnessing the signing ceremony yesterday.
Under the MoU, Celcom and TM will explore possible collaboration in the areas of HSBB be it access or transmission, wholesale Internet access, digital subscriber line access (end-mile copper network), fiber network system via wholesale long-term lease or MVNO services.
“In this day and age of multiple screens, be it phones, tablets or TVs, consumers are now being entertained and are interacting with each other in a multitude of ways,” Celcom CEO Datuk Seri Shazalli Ramly said. “The old paradigm of fixed versus mobile access is becoming increasingly irrelevant due to consumer behaviour, the lines are blurring (and we need to provide content via multiple access and devices, thus the need to collaborate).''
IDC Malaysia associate market analyst John Cheah believes TM will be able to regain a foothold in the lucrative mobile market with a tie-up with Celcom.
“However, taking into account that there are already numerous mobile operators and MVNOs, TM would need to identify a niche market or provide competitive rates,” he said. “TM could leverage on its existing broadband brands and provide a mobile data plan to complement its fixed-line counterparts.''
As for Celcom, he said: “It would be able to develop new fixed-line products. It would help control capital expenditure for Celcom in terms of long-term investments and maintenance of its next generation backhaul networks.''

First published in The Star on February 23, 2011

DiGi needs fibre optics too

Just minutes after Maxis Bhd seals a 10 year deal to buy capacity on Telekom Malaysia Bhd's Unifi, Time dotCom Bhd and DiGi.Com Bhd decides that they should do something similar.
DiGi has dished out RM139mil contract to Time to build a fiber optic network over a 10 year period. 
All boils to fibre, will it be the game changer in the future?These two cellular giants are getting serious with fibre, wonder what is Celcom Axiata doing?

Set things right in the telecoms industry

SO much has been said by so many people over the past month or so about the way some things are done in the country's telecoms industry.
The hot talk from coffee tables to the blogosphere, the mainstream media and brought up in Parliament included:
● the way nine companies were assigned the 2.6Ghz or 4G LTE spectrum recently;
● the RMbil netbook scheme;
● the allocation and usage of the RM4bil USP fund; and
● the one that caught even the Prime Minister's eye allegations that one party is allowed to hog a large chunk of the 700Mhz spectrum band.
People are expressing their views whether via the mainstream media or blogs and some of the things they are saying cannot be ignored.
Some, unfortunately, went to the extreme. What with all the mud-slinging, even the Malaysian Anti-Corruption Commission was dragged in.

Malaysians will say a resounding ‘Yes’ to more transparency in the country’s telecoms industry, including the awarding of spectrum.

Had there be more transparency from the onset, could things have panned out differently? Damage control is not easy and some parties attempting this just seem to be failing miserably.
Whilst we understand the Government's perspective in delivering things for the rakyat and perhaps those involved got over-zealous in trying to get the latest technology to connecting too fast and too wide, the policy-makers should have taken a moment to ponder on what is really needed to go forward.
There are lessons to be learnt from this episode; it depends on whether one is willing to listen and make the changes.
A case in point is the award of nine spectra to nine companies. This begs a question are we opening the floodgates for a rationalisation? Previously, seven spectra were dished out and the mobile industry was forced to consolidate to three players.
Spectrum awards should be put to test after market assessment rather than letting the market absorb the number of players, and seriously, do we really need nine to serve 28 million people?
Now that we have rushed to 4G, has someone taken stock of what spectrum has been used thus far and how much of it has been used to provide services to the rakyat?
Giving out computers is a noble thing initiated by the Government. But the Government got a lot of flak as allegations mounted that some of those who got the computers free, sold them.
Perhaps some units were given to the wrong people but we cannot build a society on that premise. We need a proper approach to ensure delivery only to the deserving and those who will appreciate the netbooks.
It is plain truth that there is a need for a common infrastructure so that all players can use it. For the growth and benefit of the industry, a single party should not be running a common infrastructure. Does this need to be re-told, over and over again, and do we need to rush to do things again?
As for the USP fund, it was a great idea. It is noble to bridge the digital divide but has someone done real checks in the remote places to see if the money has been well spent before more is pumped to fund expansion? Checks and balances are vital so that the rural folks also get on the Web.
The Government wants the best for the rakyat in terms of technology so we cannot afford a confusing state of affairs.
All the brouhaha should serve as lessons to move forward. It is imperative that the views of the rakyat be taken seriously. There should be pooling of resources and most critical of all, that there be transparency all the way.
No way should we repeat a rationalisation exercise and that is the route the younger generation wants to avoid as they'd rather be going forward than consolidating and doing damage control.
● Deputy news editor B.K. Sidhu hopes to learn something new everyday.
(Published in The Star on Dec 10, 2010 - Friday Reflections By B.K. Sidhu))

Mine with caution: Lives at stake

A miracle was what New Zealanders had sought since the Pike River coal mine blast last Friday. Even Prime Minister John Key was hoping for a miracle.
But 118 hours and 52 minutes after the first blast, a bigger blast shattered any hopes or dreams the New Zealanders had. Many people are just devasted after the second blast on Wednesday.
At the beginning of this week most newspapers carried the words hope and prayer'' in their headlines but yesterday, those changed to mourning and darkest hour.''
The front page of the New Zealand Herald was in black yesterday with the stories and pictures of families crying, while The Dominion Post's front page was in black too, with pictures of all the 29 miners and the headline Our Darkest Hour.''
The TV stations aired live feeds of the twice-daily press conferences since the first disaster and updates every now and then.
The Pike River coal mine blast is a major catastrophe that has gripped the nation. Wherever you go people just want to know the latest and the newspapers and TV stations are running around to provide updates.
You cannot blame people for hoping for a miracle as New Zealand has a population of only 4.5 million people, of whom one million are tourists. This is a country where the sheep population over 45 million far surpasses that of humans.
That aside, getting the miners out alive after the first blast had slim chances of success and as NZ Herald put it in its editorial yesterday: It is unlikely anyone could have survived the second explosion which was bigger than the first and if anyone survived the first blast they would have succumbed to carbon monoxide later.''
This is the second disaster to strike the country since Christchurch was hit with an earthquake with a magnitude of 7.1 on Sept 4.
It is also the worst disaster in three decades since 257 people died when an Air New Zealand flight crashed into Mt Erebus in November 1979.
Of the 29 miners who would have been entombed in the 2.5km underground mine, the biggest number were New Zealanders, but there were also British, Australian and South African nationals.
The coal mine operated by Pike River Coal Ltd is said to be the country's largest underground coal mine.
Following this disaster, what's next?
For families who have lost their loved ones, the newspapers are talking about recovery.'' It is not going to be easy for the family members but that may be the only route to take let go and move on.
The good thing about Australia, New Zealand and some other countries is their solid base in counselling as counselling helps in coping with grief and depression.
But the solution does not lie in counselling, or compensation and help with the funeral expenses for the families. There will be questions as to whether Pike River had been operating according to standards specified in the country.
Since the mine was in a national park, there will also be queries as to whether the environment had been compromised.
New Zealand takes a lot of pride in conservation and sustainability and it believes in recycling efforts to preserve the environment. Could there have been a breach somewhere and could the blast have been avoided in the first place?
Coal extraction is a dangerous business and there is a human cost. When something goes wrong, the cost is not just in dollars and cents, it is about people's lives for which there is no replacement.
Not long ago there was the Chilean mine tragedy, now it is New Zealand and who knows where next.
The question is: are companies going to allow humans to perish because they need to meet demand for more coal or will something drastic be done to change the way mining for coal is carried out so that lives are not compromised?

Deputy news editor B.K. Sidhu, who is in Auckland, is saddened by the incident.

(Published in The Star on Nov 26, 2010 - Friday Reflections with B.K. Sidhu)