Time Dotcom plans RM1b special dividend from data centre business

TIME Dotcom Bhd today announced it has partnered with affiliates of DigitalBridge Group Inc, a global owner and operator of digital infrastructure assets, to accelerate the expansion of its AIMS Group data centre business across Asia.

The deal — giving AIMS an enterprise value of RM3.2 billion — is expected to result in a special dividend of up to RM1 billion to Time shareholders.

The stock jumped 30 sen or more than 6% to RM4.95, the highest it hit in 52 weeks, as soon as it started trading after a one-hour suspension this morning. Time closed at 4.65 yesterday.

As part of the strategic partnership, Time said the overall AIMS business is being valued at an enterprise value of RM3.2 billion. This compares to its current book value of RM240 million and represents a significant gain since Time first acquired AIMS in 2012 for RM119 million.

The collaboration entails the immediate divestment by Time of 49% of the ordinary shares and 100% of the irredeemable convertible preference shares in AIMS Data Centre Holding Sdn Bhd, as well as 21% of the ordinary shares in AIMS Data Centre (Thailand) Ltd.

The transaction is expected to close by the end of the third quarter in 2023 (3Q23), subject to certain conditions precedent, including Time shareholder approval, being satisfied.

“This strategic partnership allows us to crystallise substantial value from the investment we have made in AIMS over the years. Proceeds from the transaction of approximately RM2 billion will partly be used to pay a special dividend of up to RM1 billion to our shareholders, and the balance will be reinvested into the Group to further grow shareholder value,” Time commander-in-chief Afzal Abdul Rahim said in the statement.

Time’s largest shareholder is Pulau Kapas Ventures Sdn Bhd with 28.94% stake, followed by Khazanah Nasional Bhd (10.67%) Employees Provident Fund (6.42%) and Retirement Fund (Inc) or KWAP (5.72%).

The partnership between Time and DigitalBridge is premised on bringing together a unique combination of two entities with distinctly different backgrounds — a focused telecoms and data centre operator with assets across Asean, and a digital infrastructure investor that has enabled the growth of some of the most successful data centre and digital infrastructure companies around the world, the company said in an exchange filing today.

It said both parties envisage a rapid and tactical expansion of data centre facilities across primary and secondary cities in Asean and beyond with a focus on providing best-in-class services to multinationals, large enterprises, content providers, Internet infrastructure providers and financial institutions.

It said the plans would centre on AIMS as the primary platform for expansion while making Malaysia a core hub and gateway for greater connectivity in the region.

AIMS is Malaysia’s highly connected, ecosystem-centric data centre, badged as the home of the Malaysian Internet. AIMS’ data centres currently include its flagship facility in downtown Kuala Lumpur, a state-of-the-art purpose-built site in Cyberjaya and a new data centre in downtown Bangkok, the company said.

On the rationale for the move, Time said following a strategic review of its data centre business in late 2021, it found significant opportunities in underserved markets across Asia.

Aggressively pursuing these opportunities would require significant investments as well as a deep understanding of global trends in the space, an ambition that the company felt would be best realised with a strategic partner that has a global lens.

“We believe that DigitalBridge is the right partner as they are committed to building on AIMS’ heritage and capitalise on its strengths. We see this as a true partnership that will allow us to tap on their global experience in other markets,” said Afzal.

In the same statement, DigitalBridge MD and Asia head Justin Chang said AIMS operates some of the most strategic data centre assets in Asean.