DNB terminates share subscription agreement with TM

• TM requested further extension, DNB turned this down without offering reason
• Termination does not impact validity of completed SSAs with the four MNOs

Digital Nasional Bhd (DNB) announced, in a statement late Friday evening, that the conditions precedent longstop date for Telekom Malaysia Bhd (TM) with respect to the Share Subscription Agreement entered between DNB, Minister of Finance (Incorporated) (MoF Inc) and TM dated 1 Dec 2023 (TM SSA) expired on 21 Aug, and consequently the TM SSA has been terminated on 23 Aug.

The longstop date for TM was previously extended from 21 June to 21 Aug to enable TM to seek its shareholders’ approval, which was one of the conditions precedent in the TM SSA. DNB said TM was unable to fulfil the condition precedent by 21 Aug and requested for a further extension of the longstop date to 31 Dec 2024. While it deliberated on the request, DNB said it was unable to extend the deadline further. It did not give a reason for its decision.

DNB terminated the TM SSA by way of issuance of the requisite notices of termination to TM and MoF Inc. on 23 Aug.

On 28 June 2024, DNB completed the Share Subscription Agreements (“SSAs”) with four mobile network operators (MNOs) in Malaysia, namely CelcomDigi Bhd through Infranation Sdn Bhd, Maxis Broadband Sdn Bhd, U Mobile Sdn Bhd and YTL Communications Sdn Bhd through YTL Power International Bhd. According to DNB, the termination of the TM SSA does not impact the validity of the completed SSAs with the four MNOs.

Under the terms of the SSAs, the four MNOs collectively acquired approximately 65.1% equity stake in DNB, with each MNO holding an approximately 16.3% stake. The Malaysian Government, represented by MoF Inc., retains an approximately 34.9% stake and a Special Share in DNB for a designated period.