MALAYSIA'S state investment agency will help finance TM International Bhd (6888) as the Asian mobile-phone operator prepares to repay a RM4.03 billion (US$1.12 billion) debt to Telekom Malaysia Bhd.
“We will be part of the long-term funding solution” for TM International, Tan Sri Azman Mokhtar, managing director of state-owned Khazanah Nasional Bhd, said in a phone interview today.
“There is absolutely no issue” about whether TM International is able to repay the loan to Telekom by April, he said. Khazanah is the controlling shareholder of TM International and Telekom.
Khazanah, based in Kuala Lumpur, is stepping in as credit markets seize up in the global financial crisis. Telekom Malaysia, the nation’s biggest fixed-line phone operator, is relying on the loan repayment to help fund its dividend program.
“TMI, they will pay to TM, and Khazanah, in turn, will actually be part of the funding solution for TMI,” Azman said. TM International is known as TMI.
It’s not yet clear how the funding will be structured, he said.
Khazanah will “back” TM International, which is also refinancing a bridging loan on a US$2 billion acquisition in India, Azman said. That will help the company repay the loan to Telekom, he said, without providing details.
“The more permanent funding solution will come through the combination of other instruments,” Azman said.
“A strong shareholder like Khazanah will back TMI, which then, in turn, further strengthens the position of TMI’s capital structure. There is no issue about them paying up the inter-company loan.”
Telekom Malaysia said yesterday it was “confident” that TM International will repay the loan on time.
TM International was spun off from Telekom Malaysia in April this year. The mobile-phone company said last month it has enough time to “explore numerous financing alternatives” because its loan for the India purchase doesn’t mature until August 2009. - Bloomberg
Khazanah to be part of TMI funding solution
Business Times - Malaysia, Malaysia