INTRODUCTION
The Company wishes to announce that on 27 December 2016, Maxis Berhad (“the Company” or “Maxis”) signed a Share Purchase Agreement (“Contract”) with MBNS Multimedia Technologies Sdn Bhd (“MMT”) for Maxis to acquire the remaining 25% non-controlling interest, comprising 833,334 ordinary shares of RM 1.00 each in Advanced Wireless Technologies Sdn Bhd (“AWT”) (such shares referred to as “AWT Shares”) for a purchase consideration of RM15,833,334. As part of the sale and purchase of the AWT Shares, Maxis and/or its related corporations will also purchase goods and services totaling RM3,000,000 in value from MMT and/or its related corporations (together “the Transaction”).
1. PARTICULARS OF THE TRANSACTION
MMT has since 2004 held a 25% stake in AWT. AWT in turn wholly-owns UMTS (Malaysia) Sdn Bhd (“UMTS”). UMTS is the holder of a 2100MHz spectrum assignment from Malaysian Communications and Multimedia Commission for 15 years expiring on 1 April 2018.
The entry into the Transaction is a related party transaction (“RPT”) and requires announcement pursuant to Paragraph 10.08(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”) and the relationships and extent of interest of the interested Directors, Major Shareholders and persons connected to Directors and Major Shareholders are set out in in Para 12 of this announcement.
2. INFORMATION ON AWT
AWT was incorporated in Malaysia under the Malaysian Companies Act, 1965 on 21 June 2000. As at the date of this announcement, the issued and paid up share capital of AWT is RM3,333,336 comprising 3,333,336 ordinary shares of RM1.00 each.
As at the date of this announcement, the shareholders of AWT are Maxis and MMT, which own 75% and 25% equity interests in AWT respectively.
The principal activity of AWT is provider of wireless multimedia related services.
The financial information for the AWT Shares based on the audited consolidated financial statements of AWT Group (AWT and UMTS) as at 31 December 2015 are as follows:-
i. The value of the assets which is the subject matter of the transaction is RM27.2 million, which is 25% of the consolidated net assets as at 31 December 2015. This is also the net book value of the assets; and
ii. The net profits that are attributable to assets are RM8.1 million, which is 25% of the consolidated profit for the financial year ended 31 December 2015.
3. INFORMATION ON MAXIS
Maxis was incorporated in Malaysia under the Malaysian Companies Act, 1965 on 7 August 2009. Maxis is a public company listed on the Main Market of Bursa Malaysia Securities Berhad.
As at the date of this announcement, the issued and paid up share capital of Maxis is RM751,031,230 comprising 7,510,312,300 ordinary shares of RM0.10 each.
The principal activity of Maxis is investment holding company whilst the Maxis Group (as defined in 6 below) offers a full suite of converged telecommunications, digital and related services and solutions.
4. INFORMATION ON MMT
MMT was incorporated in Malaysia under the Malaysian Companies Act, 1965 on 5 March 1998. As at the date of this announcement, the issued and paid up share capital of MMT is RM2.00 comprising 2 ordinary shares of RM1.00 each.
The principal activities of MMT are research and development of multimedia related technologies.
MMT’s original cost of investment in AWT is RM833,334 for subscription of 833,334 ordinary shares of RM1.00 in AWT on 19 August 2004.
5. SALIENT TERMS OF THE TRANSACTION
The salient terms of the Contract are as follows:-
(a) Sale of AWT Shares
MMT shall sell and agree to transfer and Maxis shall purchase and agree to accept the AWT Shares free from all encumbrances and claims whatsoever and with all rights, benefits and advantages now or hereafter attaching thereto, including but without limitation, all bonuses, rights, dividends and distributions declared made and/or paid as from Completion Date (as defined below) upon the terms and subject to the conditions stipulated under the Contract.
As part of the sale and purchase of AWT Shares, Maxis and/or its related corporations agree to purchase goods and services totaling RM3,000,000 in value from MMT and/or its related corporations during the period up to 31 December 2017.
(b) Purchase Consideration
The consideration for the sale of AWT Shares is RM15,833,334 to be fully satisfied in cash and to be paid on the Completion Date.
(c) Completion
The Transaction shall be completed on the third (3rd) Business Day from the date of the Contract (“Completion Date”). There are no conditions precedent to the completion of the Transaction.
(d) On Completion Date, the parties agree that the Shareholders’ Agreement dated 25 August 2004, as amended and supplemented from time to time, is mutually terminated.
6. RATIONALE FOR THE TRANSACTION
The Transaction is another important step of the Maxis Berhad group of companies’ (“Maxis Group”) transformation to streamline the Maxis Group structure. The objective is to provide Maxis Group with greater operational agility and flexibility to respond quickly in a fast evolving telecommunications market.
By acquiring the remaining 25% stake in AWT and thus having full ownership of AWT, Maxis Group could accelerate its decision-making on matters surrounding the 2100MHz spectrum assignment and other priority items that support its business plan and commercial objectives. Network infrastructure remains a critical component of the Maxis Group’s transformation journey to provide Unmatched Customer Experience.
7. EFFECT OF THE TRANSACTION
The Transaction will not have any effect on the issued and paid-up share capital of Maxis and the shareholding of its substantial shareholders. The Transaction also will not have any material effect on the earnings per share, net assets per share or gearing of Maxis for the financial year ending 31 December 2016.
8. THE HIGHEST PERCENTAGE RATIO APPLICABLE TO THE TRANSACTION AND CONSIDERATION INCLUDING BASIS AND JUSTIFICATION
Pursuant to paragraph 10.02(g) of the MMLR, the highest percentage ratio applicable to the Transaction is 0.7% (which ratio was calculated based on paragraph 10.02(g)(i) of MMLR).
This RPT value of RM 18,833,334 is, in the view of Maxis, fair having evaluated:
i. the cash and cash equivalent positions of AWT Group and its discounted cash flow projections till the expiry of the current 2100 MHz spectrum assignment on 1 April 2018; and
ii. The value of the goods and services to be purchased.
The consideration indicated will be satisfied by internal funding.
9. THE RISKS IN RELATION TO THE TRANSACTION
The financial risks associated with entering into the Transaction are expected to be limited to the Company’s investment in AWT via the acquired AWT Shares. The purchase of the goods and services are within the Maxis Group’s ordinary course of business.
10. TOTAL AMOUNT TRANSACTED WITH THE SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS
Excluding those recurrent related party transactions as approved by the shareholders of the Company on 20 April 2016, Maxis has no other transaction with the same related party (having the meaning of related party under the MMLR) for the preceding 12 months.
11. APPROVALS REQUIRED
The Transaction does not require the approval of the shareholders of Maxis or approvals from any relevant authorities.
12. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
Details of the interests of the Directors and Major Shareholders of Maxis and persons connected to them as at 23 December 2016, and the nature and extent of their relationships to the parties are as set out in Appendix 1 attached hereto.
13. STATEMENT OF THE AUDIT COMMITTEE OF MAXIS
The Audit Committee save for Lim Ghee Keong, who is an interested Director is of the view that the Transaction is in the best interests of Maxis, fair, reasonable and on normal commercial terms and not detrimental to the interests of the minority shareholders of Maxis, due to the reasons stated in the rationale and considering the limited level of risk exposure as mentioned above.
14. STATEMENT BY THE BOARD OF DIRECTORS
The Board of Directors save for Lim Ghee Keong, who is an interested Director having considered the recommendation of the Audit Committee and the commercial proposition, is of the view that the Transaction is in the best interest of Maxis, fair, reasonable and on normal commercial terms and not detrimental to the interests of the minority shareholders of Maxis.
This announcement is dated 27 December 2016.
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