Singapore’s ST Telemedia to reduce its stake in Malaysian telco to below 20%

By TMR

THE controversial award of the second 5G network, won by underdog U Mobile Sdn Bhd through a tender process that was overseen by the Malaysian Communications and Multimedia Commission (MCMC), is still unfolding.

In the latest development, the Singapore owner of a majority stake in U Mobile has sold down part of its stake to a company controlled by billionaire Tan Sri Vincent Tan Chee Yioun and a Johor princess.

On Wednesday (Dec 4), Singapore Technologies Telemedia Pte Ltd (ST Telemedia) announced that its wholly-owned subsidiary Straits Mobile Investments Pte Ltd has entered into a conditional share purchase agreement pursuant to sell a portion of its stake to Mawar Setia Sdn Bhd.

After the sale, it will hold a ‘minority stake of approximately 20%’ in U Mobile which will no longer be considered a subsidiary, ST Telemedia said in the filing with the Singapore Exchange (SGX).

Mawar Setia Sdn Bhd is a vehicle controlled by U Mobile chairman Vincent Tan and Johor princess Tunku Tun Aminah Sultan Ibrahim, the only daughter of Malaysia’s King, Sultan Ibrahim.

ST Telemedia is controlled by Singapore state-owned investment firm Temasek Holdings (Pvt) Ltd.

On Nov 1, MCMC announced that U Mobile was selected to build Malaysia’s second 5G network, a decision which was criticised by some parties as U Mobile was seen as the smallest of the telecommunication players in the running for the bid.

In its statement, U Mobile said that it would reduce its foreign ownership to 20%.

Last month, Communications Minister Fahmi Fadzil said the general conditions for foreign equity holdings in individual licences for network facility providers and network service providers are limited to 49% with Bumiputera ownership being mandated to be at least 30%.

“Currently, U Mobile’s foreign equity holdings remain within the limits set by the special conditions of the licence granted to the firm,” he told the Parliament.

Before the sell down by the Singapore entity, Sultan Ibrahim was the second largest biggest U Mobile shareholder with a 22.3% stake in the company.

Defending Sultan Ibrahim’s ownership of shares in U Mobile, Tan had said that the King of Malaysia had been a shareholder in the telco since 2015, way before becoming the country’s king.