Serial No.
Strictly Private & Confidential
INFORMATION MEMORANDUM
MAXIS COMMUNICATIONS BERHAD
(Company No. 158400-V)
(Incorporated in Malaysia)
RM500.0 MILLION NOMINAL AMOUNT
COMMERCIAL PAPER AND MEDIUM TERM NOTES PROGRAMME
AND
RM500.0 MILLION NOMINAL AMOUNT MEDIUM TERM NOTES
PROGRAMME
Lead Arranger
HSBC Bank Malaysia Berhad
(Company No: 127776-V)
2 February 2007
RESPONSIBILITY STATEMENT
This Information Memorandum has been approved by the directors of Maxis Communications Berhad
(Company No. 158400-V) (“Issuer” or “Maxis”) and they collectively and individually accept full
responsibility for the accuracy of the information given and confirm that, after having made all
reasonable enquiries, and to the best of their knowledge and belief, there are no false or misleading
statements or other material facts the omission of which would make any statement in this
Information Memorandum false or misleading and that there is no material omission in this
Information Memorandum.
IMPORTANT NOTICE AND GENERAL STATEMENTS OF DISCLAIMER
The Issuer has authorised HSBC Bank Malaysia Berhad (“Lead Arranger”) to distribute this
Information Memorandum, which is now being provided by the Lead Arranger on a confidential basis
to potential investors to whom an issue, offer or invitation to subscribe or purchase the Notes (as
defined in this Information Memorandum) would constitute an excluded issue, excluded offer or
excluded invitation as specified or set out in Schedule 2 or Section 38(1)(b) and Schedule 3 or Section
39(1)(b) and Schedule 5 or Section 66(3) of the Securities Commission Act 1993 (“SCA”) as
amended from time to time for the sole purpose of assisting them to decide whether to subscribe for
or purchase the first issue of the Notes.
THIS INFORMATION MEMORANDUM MAY NOT BE, IN WHOLE OR IN PART, USED
FOR ANY ISSUE OF THE NOTES (OTHER THAN FOR THE FIRST ISSUE) OR BE
RELIED ON BY ANY POTENTIAL INVESTORS IN ANY ISSUE OF THE NOTES (OTHER
THAN FOR THE FIRST ISSUE).
This Information Memorandum supersedes in its entirety the Information Memorandum dated 7
January 2005 which was previously issued by Maxis.
This Information Memorandum may not be, in whole or in part, reproduced or used for any other
purpose, or shown, given, copied to or filed with any other person including, without limitation, any
government or regulatory authority except with the prior written consent of the Issuer or as required
under Malaysian laws, regulations or guidelines.
None of the information or data contained in this Information Memorandum has been independently
verified by the Lead Arranger and no representation or warranty, express or implied, is given or
assumed by the Lead Arranger as to the authenticity, origin, validity, accuracy or completeness of
such information and data or that the information or data remains unchanged in any respect after the
relevant date shown in this Information Memorandum.
The Lead Arranger has not accepted and will not accept any responsibility for the information and
data contained in this Information Memorandum or otherwise in relation to the Notes and shall not be
liable for any consequences of reliance on any of the information or data in this Information
Memorandum.
No person is authorised to give any information or data or to make any representation or warranty
other than as contained in this Information Memorandum and, if given or made, any such
information, data, representation or warranty must not be relied upon as having been authorised by
the Issuer, the Lead Arranger or any other person.
This Information Memorandum has not been and will not be made to comply with the laws of any
jurisdiction other than Malaysia (“Foreign Jurisdiction”), and has not been and will not be lodged,
registered or approved pursuant to or under any legislation (or with or by any regulatory authorities or
other relevant bodies) of any Foreign Jurisdiction and it does not constitute an issue or offer of, or an
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invitation to subscribe for or purchase the Notes or any other securities of any kind by any party in
any Foreign Jurisdiction.
This Information Memorandum is not a prospectus and is not intended to be a prospectus.
The distribution or possession of this Information Memorandum in or from certain Foreign
Jurisdictions may be restricted or prohibited by law. Each recipient is required by the Issuer and the
Lead Arranger to seek appropriate professional advice regarding, and to observe, any such restriction
or prohibition. Neither the Issuer nor the Lead Arranger accept any responsibility or liability to any
person in relation to the distribution or possession of this Information Memorandum in or from any
Foreign Jurisdiction.
By accepting delivery of this Information Memorandum, each recipient agrees to the terms upon
which this Information Memorandum is provided to such recipient as set out in this Information
Memorandum, and further agrees and confirms that (a) it is lawful for the recipient to subscribe for or
purchase the Notes under all jurisdictions to which the recipient is subject, (b) the recipient has
complied with all applicable laws in connection with such subscription or purchase of the Notes, (c)
the Issuer, the Lead Arranger and their respective directors, officers, employees and professional
advisers are not and will not be in breach of the laws of any jurisdiction to which the recipient is
subject to as a result of such subscription or purchase of the Notes, and they shall not have any
responsibility or liability in the event that such subscription or purchase of the Notes is or shall
become unlawful, unenforceable, voidable or void, (d) it is aware that the Notes can only be offered,
sold, transferred or otherwise disposed of directly or indirectly in accordance with the relevant selling
restrictions and all applicable laws, (e) it has sufficient knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of subscribing or purchasing the
Notes, and is able and is prepared to bear the economic and financial risks of investing in or holding
the Notes, (f) it is subscribing or accepting the Notes for its own account, and (g) it is a person to
whom an issue, offer or invitation to subscribe or purchase the Notes would constitute an excluded
issue, excluded offer or excluded invitation as specified or set out in Schedule 2 or Section 38(1)(b)
and Schedule 3 or Section 39(1)(b) and Schedule 5 or Section 66(3) of the SCA as amended from
time to time. Each recipient is solely responsible for seeking all appropriate experts’ advice as to the
laws of all jurisdictions to which it is subject. For the avoidance of doubt, this Information
Memorandum shall not constitute an offer or invitation to subscribe or purchase the Notes in relation
to any recipient who does not fall within item (g) above.
This Information Memorandum is not, and should not be construed as, a recommendation by the
Issuer, the Lead Arranger or any other party to the recipient to subscribe for or purchase the Notes.
This Information Memorandum is not a substitute for, and should not be regarded as, an independent
evaluation and analysis and does not purport to be all inclusive. Each recipient should perform and is
deemed to have made its own independent investigation and analysis of the Issuer, the Notes and all
other relevant matters, and each recipient should consult its own professional advisers. All
information and statements herein are subject to the detailed provisions of the respective agreements
referred to herein and are qualified in their entirety by reference to such documents.
Neither the delivery of this Information Memorandum nor the offering, sale or delivery of any Notes
shall in any circumstance imply that the information contained herein concerning the Issuer or any
members of the Group (as defined in this Information Memorandum) is correct at any time
subsequent to the date hereof or that any other information supplied in connection with the Notes is
correct as of any time subsequent to the date indicated in the document containing the same. The
Lead Arranger expressly does not undertake to review the financial condition or affairs of the Issuer
or any members of the Group during the life of the Notes or to advise any investor of the Notes of any
information coming to their attention. For the first issue of the Notes, the recipient of this Information
Memorandum or the potential investors should review, inter alia, the most recently published
documents incorporated by reference into this Information Memorandum when deciding whether or
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not to subscribe for or purchase any Notes. For any subsequent issue of the Notes, this Information
Memorandum may not be used or relied on.
This Information Memorandum includes certain historical information, estimates, or reports thereon
derived from sources mentioned in this Information Memorandum and other parties with respect to
the Malaysian, Indian and/or Indonesian economies, the material businesses in which the Issuer
and/or the Group operates and certain other matters. Such information, estimates, or reports have been
included solely for illustrative purposes. No representation or warranty is made as to the accuracy or
completeness of any information, estimate and/or report thereon derived from such and other third
party sources.
This Information Memorandum includes “forward looking statements”. These statements include,
among other things, discussions of the Issuer’s business strategy and expectations concerning its
position in the Malaysian, Indian and/or Indonesian economies, future operations, profitability,
liquidity, capital resources and financial position. All these statements are based on estimates and
assumptions made by the Issuer and third party consultants that, although believed to be reasonable,
are subject to risks and uncertainties that may cause actual events and the future results of the Issuer
to be materially different from that expected or indicated by such statements and estimates and no
assurance can be given that any of such statements or estimates will be realised. In light of these and
other uncertainties, the inclusion of a forward looking statement in this Information Memorandum
should not be regarded as a representation or warranty by the Issuer or any other person that the plans
and objectives of the Issuer will be achieved.
Any discrepancies in the tables included in this Information Memorandum between the listed
amounts and totals thereof are due to, and certain numbers appearing in this Information
Memorandum are shown after, rounding.
STATEMENTS OF DISCLAIMER BY THE SECURITIES COMMISSION
A copy of this Information Memorandum will be deposited in accordance with the SCA with the
Securities Commission, who takes no responsibility for its contents.
The Securities Commission has approved the issuance of the Notes pursuant to the SCA. Please note
that the approval of the Securities Commission shall not be taken to indicate that the Securities
Commission recommends the subscription or purchase of the Notes.
The Securities Commission shall not be liable for any non-disclosure on the part of the Issuer and
assumes no responsibility for the correctness of any statements made or opinions or reports expressed
in this Information Memorandum.
INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS
AND RISKS OF THE INVESTMENT.
THE ISSUANCE OF THE NOTES CARRY CERTAIN RISKS AND ALL POTENTIAL
INVESTORS ARE STRONGLY ENCOURAGED TO EVALUATE EACH ISSUANCE OF
THE NOTES ON ITS OWN MERIT.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents published or issued from time to time after the date hereof and on or before
the first issue of the Notes shall be deemed to be incorporated in, and to form part of, this Information
Memorandum:
(a)
the most recently audited annual financial statements of the Issuer; and
(b)
all supplements or amendments to this Information Memorandum circulated by the Issuer, if
any,
save that any statement contained herein or in a document which is deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for the purpose of this Information
Memorandum to the extent that a statement contained in any such subsequent document which is
deemed to be incorporated by reference herein modifies or supersedes such earlier statement (whether
expressly, by implication or otherwise). Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this Information Memorandum.
On or before the first issue of the Notes, the Issuer will provide, without charge, to each person to
whom a copy of this Information Memorandum has been delivered, upon the request of such person, a
copy of any or all of the documents deemed to be incorporated herein by reference unless such
documents have been modified or superseded as specified above. Requests for such documents should
be directed to the Issuer at its registered office set out at the end of this Information Memorandum.
CONFIDENTIALITY
This Information Memorandum and its contents are strictly confidential and the information herein
contained is given to the recipient strictly on the basis that the recipient shall ensure the same remains
confidential. Accordingly, this Information Memorandum and its contents, or any information, which
is made available to the recipient in connection with any further enquiries, must be held in complete
confidence.
This Information Memorandum is submitted to selected persons specifically in reference to the
Programmes (as defined in this Information Memorandum) to whom an issue would constitute an
excluded issue, excluded offer or excluded invitation as specified or set out in Schedule 2 or Section
38(1)(b) and Schedule 3 or Section 39(1)(b) and Schedule 5 or Section 66(3) of the SCA as amended
from time to time.
In the event that there is any contravention of this confidentiality undertaking or there is reasonable
likelihood that this confidentiality undertaking may be contravened, the Issuer may, at its discretion,
apply for any remedy available to the Issuer whether at law or equity, including without limitation,
injunctions. The Issuer is entitled to fully recover from the contravening party all costs, expenses and
losses incurred and/or suffered, in this regard. For the avoidance of doubt, it is hereby deemed that
this confidentiality undertaking shall be imposed upon the recipient, the recipient’s professional
advisors, directors, employees and any other persons who may receive this Information Memorandum
(or any part of it) from the recipient. The recipient shall be responsible for any breach of this
confidentiality undertaking by the recipient’s professional advisers, directors, employees and other
persons who may receive this Information Memorandum (or any part of it) from the recipient.
The recipient must return this Information Memorandum and all reproductions thereof whether in
whole or in part and any other information in connection therewith to the Lead Arranger promptly
upon the Lead Arranger’s or the Issuer’s request, unless that recipient provides proof of a written
undertaking satisfactory to the Lead Arranger and the Issuer with respect to destroying these
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documents as soon as reasonably practicable after the said request from the Lead Arranger or the
Issuer and subsequent confirmation of destruction of these documents.
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TABLE OF CONTENTS
PAGE NO
GLOSSARY OF DEFINITIONS AND ABBREVIATIONS...............................................................vii
1.
INTRODUCTION.........................................................................................................................1
2.
INVESTMENT CONSIDERATIONS..........................................................................................2
3.
KEY FINANCIAL HIGHLIGHTS...............................................................................................9
4.
TERMS AND CONDITIONS OF CPs/MTNs ...........................................................................10
5.
TERMS AND CONDITIONS OF MTNs...................................................................................14
6.
RATINGS .................................................................................................................................18
7.
UTILISATION OF PROCEEDS ................................................................................................19
8.
BACKGROUND INFORMATION ON MAXIS .......................................................................20
9.
BUSINESS OVERVIEW............................................................................................................34
10.
THE REGULATION OF TELECOMMUNICATIONS IN MALAYSIA .................................43
11.
DOCUMENTS AVAILABLE FOR INSPECTION ...................................................................47
APPENDIX I ........................................................................................................................................ 48
TERMS AND CONDITIONS OF THE PROGRAMMES .................................................................. 48
APPENDIX II ....................................................................................................................................... 70
AUDITED FINANCIAL STATEMENT FOR FINANCIAL
YEAR ENDED 31 DECEMBER 2005 ................................................................................................ 70
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GLOSSARY OF DEFINITIONS AND ABBREVIATIONS
Except where the context otherwise requires, the following abbreviations shall apply throughout this
Information Memorandum:
2G/2.5G
Second generation or 2G refers to the digital wireless
communications systems which uses circuit switching
technology. 2.5G uses packet switching technology and offers
high speed data transmission rates of up to 115 kbps. 2G
mobile systems can be upgraded to become 2.5G mobile
systems;
3G
Third generation digital wireless communications system
which uses packet switching technology and offers higher
speed data transmission rates (between 144 kbps to 2Mbps)
than available under 2G and 2.5G;
3G Spectrum Assignment
The Spectrum Assignment No. SA/02/2003 awarded by the
Commission on 2 April 2003 to UMTS with effect from 2
April 2003 to 1 April 2018;
access
Point at which entry is gained into a circuit or a network
interconnection; may be switched or dedicated;
ACL
Aircel Cellular Limited, a company incorporated in the
Republic of India;
ADSL
Asymmetric Digital Subscriber Line; a digital subscriber line
of copper loop enhanced technologies, which is asymmetric,
providing faster transmission rates downstream than upstream.
It is suited to fast internet access where requests for web pages
and e-mail generally require less bandwidth than the receipt of
multimedia and web pages. It is not suited for
videoconferencing and two-way file transfer, as these require
symmetric communication;
Aircel
Aircel Limited, a company incorporated in the Republic of
India;
Aircel Group
Aircel and its subsidiaries ACL and DWL;
ARPU
Average Revenue Per User;
Astro
ASTRO ALL ASIA NETWORKS plc (Registration No.
4841085), a company incorporated in England and Wales, and
registered as a foreign company in Malaysia (Company No.
994178-M);
AWT
Advanced Wireless Technologies Sdn Bhd (Company No.
517551-U);
backbone
Part of the communications network that provides broadband
connection between switches;
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bandwidth
A measure of data sent through a connection. The greater the
bandwidth, the greater the information carrying capacity.
Bandwidth is expressed in hertz for analogue devices and in
bits per second for digital devices;
base station
A multi-circuit transceiver located within a cell used for
communicating between mobile telephones within the cell and
the BSC or MSC;
BNM
Bank Negara Malaysia;
Board
Board of Directors of Maxis;
broadband
Transmission capacity having a bandwidth greater than 2
Mbps; capable of high-speed data transmission;
BSC
Base Station Controller; in a mobile network, the BSC
controls several cells and handles call set-up and management;
Bursa Securities
Bursa Malaysia Securities Berhad (Company No. 635998-W);
capacity
The information carrying ability of a channel, a circuit, or a
piece of telecommunications equipment;
CATV
Cable Television;
CDMA
Code Division Multiple Access;
cell
The basic geographical unit of a cellular mobile system;
represents the radio frequency coverage area in the mobile
system resulting from operation of a single multiple channel
set of base station frequencies;
CEO
Chief Executive Officer;
circles
In the Republic of India, licences are granted according to
areas called “circles”, each of which corresponds generally to
a state in India, with a few exceptions being (a) the 4 metro
circles, which are essentially major cities, (b) the collection of
states in North East, which are aggregated as a single circle
“North East”, and (c) circles covering more than 1 state as a
result of reorganisation and split in the states;
circuit switching
A method of transmitting voice or data which involves setting
up a cell using switches and reserving the circuit for such use
until the cell is terminated;
CMA
Communications and Multimedia Act, 1998;
Code
(1) the Rules on the Scripless Securities under the RENTAS
System issued by BNM;
(2) the Code of Conduct and Market Practices for the
Malaysian Corporate Bond Market issued by IPBM and
approved by BNM; and/or
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(3) the FAST Rules issued by BNM;
as modified or revised or substituted from time to time;
Commission or MCMC
Malaysian Communications and Multimedia Commission,
established under the MCMCA;
Comverse Kenan
Comverse Kenan UK, a company incorporated in England and
Wales;
Consolidated Net Tangible Assets
The aggregate of the Issuer’s consolidated equity share capital
and reserves after deducting goodwill and other intangibles.
For the avoidance of doubt, any double counting shall be
disregarded;
content
Information in the form of text, image, sound or video;
CPs
The commercial papers to be issued by the Issuer under the
CP/MTN Programme and any reference to a “CP” means any
one thereof;
CPs/MTNs
The commercial papers or medium term notes to be issued by
the Issuer under the CP/MTN Programme;
CP/MTN Programme
up to RM500.0 million nominal amount commercial
paper/medium term notes issuance programme;
CP/MTN Trust Deed
The trust deed entered or to be entered into between Maxis
and the Trustee in respect of the CP/MTN Programme;
Deccan
Deccan Digital Networks Private Limited, a company
incorporated in the Republic of India;
domain name
A unique name which identifies the location of a website on
the internet;
DoT
Department of Telecommunications, India;
DWL
Dishnet Wireless Limited, a company incorporated in the
Republic of India;
EPF
Employees Provident Fund Board;
Ericsson
Ericsson (Malaysia) Sdn Bhd;
FAST
the Fully Automated System for Issuing/Tendering in respect
of private debt securities being an electronic tendering system
operated by BNM whereby persons approved by BNM will
participate in such system and may submit their tenders
electronically;
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FAST Rules
the rules published by BNM relating to FAST, as determined
by BNM or any other relevant regulatory authorities, as the
same may be amended, modified or supplemented from time
to time;
fibre optic
A means of providing high-speed data transmission using light
to send signals through glass fibres;
Frequency
The number of cycles per second, measured in hertz, of a
periodic oscillation or wave in radio wave propagation;
Gbps
1 billion bits per second;
GCSHL
Global Communication Services Holdings Ltd, a wholly
owned subsidiary of Maxis incorporated in Mauritius;
GPRS
General Packet Radio Service; an enhancement of the GSM
system that supports packet switching and offers higher speed
data transmission rates than 2G; also referred to as 2.5G;
GSM
Global System for Mobile communications; one of the most
widely used standards for mobile communications, initially
developed to standardise the use of mobile technology in
Europe;
HLR
Home Location Register; a database in a mobile network
which records information relating to the subscriber such as
current and most recently used network and location area;
HSBC
HSBC Bank Malaysia Berhad (Company No. 127776-V);
HSDPA
High Speed Downlink Packet Access;
IDD
International Direct Dialling;
IDR
Indonesian Rupiah;
INR
Indian Rupees;
Internet
The interconnection of servers worldwide that provides
communications and application services to an international
base of business, consumers, education, research, government
and other organisations;
IP
Internet Protocol; a standard that keeps track of network
addresses for different nodes, routes outgoing messages, and
recognises incoming messages;
IPBM
INSTITUT PENIAGA BON MALAYSIA (Company
No.392045-X), a company incorporated in Malaysia and
includes its successors in title and assigns;
IPLC
International Private Leased Circuit;
Kbps
1,000 bits per second;
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LAN
Local Area Network; a short distance data communications
network (usually within a building);
Licensing Regulations
Communications and Multimedia (Licensing) Regulations
2000;
LogicaCMG
LogicaCMG Sdn Bhd (Company No. 149755-X);
Malaysian Group
Maxis and its Subsidiaries which are incorporated in
Malaysia;
Malaysian Mobile
Malaysian Mobile Services Sdn Bhd (Company No. 73315V);
Material Subsidiary
at any time, a Subsidiary of the Issuer (other than a Subsidiary
which is incorporated outside Malaysia) which:
(a)
has tangible net assets representing 5% or more of
Consolidated Net Tangible Assets of the Issuer;
excluding Maxis Mobile so long as its main business is
to provide corporate support and service to the Issuer
and its Subsidiaries and to carry out the Universal
Service Provision project; or
(b)
has annual turnover representing 5% or more of the
annual consolidated turnover of the Issuer and all its
Subsidiaries,
in each case calculated on a consolidated basis and “Material
Subsidiaries” shall be construed accordingly.
Maxis or the Issuer
Maxis Communications Berhad (Company No. 158400-V);
Maxis Broadband
Maxis Broadband Sdn Bhd (Company No. 234053-D);
Maxis Group or Group
Maxis and its Subsidiaries;
Maxis International
Maxis International Sdn Bhd (Company No. 240071-T);
Maxis Mobile
Maxis Mobile Sdn Bhd (Company No. 229892-M);
Mbps
1 million bits per second;
MCMCA
Malaysian Communications and Multimedia Commission Act,
1998;
MHz
Megahertz; 1 million cycles per second;
microwave
A means of transmitting signals through the air between
microwave towers;
Minister
Minister of Energy, Water and Communications;
MMT
MBNS Multimedia Technologies Sdn Bhd (Company No.
458630-W);
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MNP
Mobile Number Portability;
Motorola
Motorola Inc. (or a Malaysian affiliate, as the case may be);
MSC
Mobile Switching Centre; a switching centre in a mobile
network that keeps track of users, processes calls and routes
calls to users through the BSCs;
MTNs
The medium term notes to be issued by the Issuer under the
CP/MTN Programme or the MTN Programme and any
reference to “MTN” means any one thereof;
MTN Programme
up to RM500.0 million nominal amount medium term notes
issuance programme;
MTN Trust Deed
The trust deed entered or to be entered into between Maxis
and the Trustee in respect of the MTN Programme;
MVNO
Mobile Virtual Network Operator;
Network
A group of 2 or more computer systems linked together;
NOFN
National Optic Fibre Network, Maxis’ national fibre optic
backbone;
Notes
Collectively, the CPs/MTNs and the MTNs to be issued under
the CP/MTN Programme and the MTN Programme
respectively and reference to “Note” means any one thereof;
NSS
Network Switching System;
NTS
PT Natrindo Telepon Seluler, a company incorporated in
Indonesia;
packet switching
A method of transmitting voice, data and video using data
network. Unlike the PSTN which uses circuit switching,
packet switched networks do not reserve a circuit between end
points. Instead they break up messages or files into small
packets. Each message packet may take a different route from
origin to destination, travelling along network circuits that are
shared with packets from other messages;
Programmes
Collectively, the CP/MTN Programme and the MTN
Programme and reference to “Programme” means any one
thereof;
PSTN
Public Switched Telephone Network; a fixed telephone
network system based on copper wires carrying analogue
voice data;
RAM
Rating Agency Malaysia Berhad (Company No. 208095-U);
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RENTAS
the scripless book-entry securities trading and funds transfer
system known as Real Time Electronic Transfer of Funds and
Securities operated and managed by BNM as varied, upgraded
or substituted from time to time;
RENTAS Rules
the rules published by BNM relating to RENTAS, as
determined by BNM or any other relevant regulatory
authorities, as the same may be amended, modified or
supplemented from time to time;
RM and sen
Ringgit Malaysia and sen, respectively, the lawful currency of
Malaysia;
roaming
When mobile customers leave their own mobile carrier’s
home network and move on to other mobile operators’
networks;
SC
Securities Commission;
server
A shared computer on a LAN that provides services to other
computers in the network;
Siemens
Siemens A.G. (or a Malaysian affiliate, as the case may be);
SMS
Short Message Service; a service whereby mobile telephone
users may send text messages. In GSM systems, a text
message can have a maximum of 160 characters;
Subsidiary
Has the meaning defined in Section 5 of the Companies Act
1965 and “Subsidiaries” shall be construed accordingly;
switch
A sophisticated computer in a telephony network or data
communications
network
that
connects
networks
automatically in response to signals that are carried to it;
Tanjong
Tanjong Public Limited Company (Registration No. 210874),
a company incorporated in England and Wales and registered
as a foreign company in Malaysia (Company No. 990903-V);
Telekom Malaysia
Telekom Malaysia Berhad (Company No. 128740-P);
TG
Teleglobal Investments BV, a wholly owned subsidiary of
Maxis incorporated in the Netherlands;
TOC
Technical Operating Centre and “TOCs” shall be construed
accordingly;
trunk
A group of circuit that carry call traffic in and out of the
switch;
Trustee
PB Trustee Services Berhad (Company No. 7968-T) as trustee
for the holders of the Notes;
UAS licence
Unified Access Services Licence;
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UMTS
UMTS (Malaysia) Sdn Bhd (Company No. 520422-D);
USD
United State Dollars, the lawful currency of the United States;
UTSB
Usaha Tegas Sdn Bhd (Company No. 121062-M);
VSAT
Very Small Aperture Terminal; a small earth station for
satellite transmission of data handling up to 55 kbps of digital
transmission;
WiMAX
Worldwide Interoperability for Microwave Access;
WLAN
Wireless Local Area Access Network.
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1.
INTRODUCTION
Maxis was incorporated as a private limited company in Malaysia under the name Binariang Sdn Bhd
on 19 December 1986 under the Companies Act 1965. On 5 September 1997, Maxis was converted to
a public limited company and changed its name to Binariang Berhad. Maxis assumed its present
name, Maxis Communications Berhad, on 12 July 1999. Maxis was listed on Bursa Securities on 8
July 2002.
The principal activities of Maxis are that of a holder of investments and a provider of services to its
subsidiaries. The principal activities of the Group are that of a mobile services provider, a fixed
services provider and an international gateway services provider.
Maxis completed its acquisition of 51% equity interest in NTS and 74% equity interest in Aircel in
April 2005 and March 2006 respectively. Aircel is principally engaged in the business of providing
cellular services, and together with its subsidiaries ACL and DWL, have operations in several circles
in the Republic of India. NTS is principally engaged in the business of providing mobile
telecommunications services in Indonesia and is currently preparing for commercial launch of its
services.
Maxis proposes to issue up to RM500.0 million CPs and/or MTNs under the RM500.0 million
CP/MTN Programme and up to RM500.0 million MTNs under the RM500.0 million MTN
Programme.
The summary terms and conditions of the Programmes are set out in Appendix I of this Information
Memorandum.
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2.
INVESTMENT CONSIDERATIONS
Prospective investors of the Notes should consider carefully all information set out in this Information
Memorandum and, in particular, the following risks involved. The Notes are subject to certain risks
that could adversely affect the business of the Issuer. The following section does not purport to be
complete or exhaustive. Prospective investors should undertake their own investigations and analysis
on the Issuer, its business and risks associated with the Notes.
The information contained in this Information Memorandum includes forward-looking statements
which implies risks and uncertainties. The Issuer’s actual results could differ materially from those
anticipated in these forward looking statements and/or otherwise projected as a result of certain
factors, including but not limited to those set forth in this section. The Issuer expressly disclaims any
obligation or undertaking to provide any updates or revisions to any forward looking statements
contained herein to reflect any changes in the Issuer’s expectations with regard thereto or any change
in events, conditions or circumstances on which any such statement is based.
2.1
Consideration Relating to the Notes
(a)
No Prior Market for the Notes
There can be no assurance as to the liquidity or sustainability of any market that may develop
for the Notes, the ability of holders to sell their Notes, or the prices at which holders would be
able to sell their Notes.
(b)
Ratings
It is a condition to the issuance of the Notes that the Programmes be rated. Please refer to Section
6 of this Information Memorandum for further details on the current rating of the Programmes.
The Programmes are subject to rating reviews by RAM (or any other competent rating agency in
Malaysia) annually. As a result of these rating reviews, there can be no assurance that the current
ratings of the Programmes will remain and that there is a possibility that the ratings may be
revised or withdrawn by RAM.
The ratings will address the likelihood of the receipt by the holders of the Notes of the
distributions to which they are entitled under the Programmes. A rating is not a recommendation
to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
(c)
Unsecured Securities
The Notes constitute direct, unconditional, unsecured and unsubordinated obligations of the
Issuer ranking at all times at least pari passu without any preference amongst themselves and
with all other direct, unconditional, unsecured and unsubordinated liabilities of the Issuer, present
or future, other than liabilities preferred by law and liabilities which benefit from liens or are
subject to rights of set-off arising in the normal course of trading. As such, in the event of the
insolvency of the Issuer, the holders of the Notes will only be entitled to participate in the general
pool of assets of the Issuer available to the unsecured creditors of the Issuer, after payment of
mandatorily preferred obligations. There can be no assurance that in such event a holder of the
Notes will receive payment in full or at all in respect of the debt obligations represented by the
Notes.
-2-
2.2
Considerations Relating to the Group
(a)
Political, Economic and Business Considerations
Like all other business entities, changes in political, economic, business and credit
environment both domestically and internationally could materially and adversely affect the
financial and business prospects of the Group. These political, economic, business and credit
uncertainties include, but is not limited to, the changes in political leadership, expropriation,
nationalisation, renegotiations or nullification of existing contracts, changes in the bank or
debt market, changes in rates of interest, methods of taxation and foreign currency exchange
rules. No assurance can be given that any of these factors will not have an adverse effect on
the business and prospects of the Group.
(b)
Overseas Expansion
Given that the Malaysian mobile market is reaching saturation point, the future growth of the
Group would to a large extent depend on its ability to identify suitable investment
opportunities and successfully carry out its expansion plans overseas. There is no assurance
that Maxis will be able to identify further acquisitions due to limited opportunities,
competition from other potential investors, foreign ownership restrictions, government and
regulatory policies and political considerations. If further acquisitions are identified, there can
be no assurance that such opportunity would be on acceptable commercial terms.
In addition, the Group may be unable to successfully manage its existing or new ventures or
transplant and adopt its business model into its existing or new ventures due to differences in
the market and regulatory environment. There can be no assurance that the Group will be able
to generate synergies from its overseas ventures and be successful in building regional
footprint or be able to maintain the Group’s credit risk profile as a result of the expansion.
Delay and failure to achieve these may adversely affect the financial and operations results of
the Group.
(c)
Key Management and Successful Implementation of its Business Strategy
The continued growth and successful implementation of the Group’s business strategy and the
realisation of synergies from Maxis’ international operations will depend on the key
management team of the Group. There can be no assurance that the key management team
will remain with the Group in the future.
(d)
Capital Investment and Access to Financing
The telecommunication service and industry is capital intensive in nature, which requires
continuous capital investment in order to remain competitive and to continue to provide
technologically compatible services. Maxis is expected to finance these through internally
generated funds and new loans or debts. Although Maxis currently has access to the bank and
debt market given its existing strong financial and credit standing, low gearing and its
dominant business position in the Malaysian mobile market, there is no assurance that Maxis
will be able to maintain its credit standing or that adequate financing at competitive terms will
continue to be made available to the Group.
(e)
Foreign exchange fluctuations
Substantially all of the Malaysian Group’s revenue is denominated in RM. However, since
overseas investments, certain equipment purchases for the Malaysian Group and other costs
and liabilities are denominated in or referenced to foreign currencies, a weakening of the RM
may increase capital and investment costs to the Group. Fluctuations in the exchange rate
-3-
between INR and USD or RM and between IDR and USD or RM, as well as fluctuations of
local interest rates, could negatively affect investment returns and valuation of assets upon
consolidation.
Although these risks may, to some extent, be mitigated by hedging instruments that the Group
may enter from time to time, there can be no assurance that these measures will be adequate.
(f)
Technological Change
Given that the mobile market is highly competitive and is reliant on advanced technology, the
Group is exposed to a number of operating risks, common to all telecommunications
companies. These include, among others, keeping up with emerging, on-going and rapid
technological developments as a result of emerging industry standard and trends and changes
in market demand and maintaining sophisticated charging, billing and credit control systems.
Emerging and future technological changes may adversely affect the viability and
competitiveness of the Group’s business. Further, changes in market demands and consumer
trends may require the Group to adopt new technologies that could render its existing
technologies obsolete. To respond successfully to such technological advances, the Group
may require substantial capital expenditure and access to technologies to integrate new
technologies to existing platforms. Maxis cannot predict how emerging and future
technological changes will affect the operations or the competitiveness of its service. In
addition, no assurance can be given that new technologies adopted may be profitable,
adequate or compatible with technologies of its competitors or other carriers or that the Group
will be successful in responding in a timely and cost effective manner to emerging and future
technological changes. Failure to respond appropriately or keep pace with technological
changes may have an adverse effect on the Group’s business and operations.
2.3
Considerations Relating to the Malaysian Operations
(a)
Competitive Environment and Domestic Market Growth
The Malaysian Group operates in a competitive environment and faces increasing competition
from existing mobile players, new 3G entrants and MVNOs which has resulted in, and is
expected to continue to result in, greater price competition in the mobile market, with
competitors lowering (or waiving) monthly access fees and call charges and offering more
attractive product and service packages in the form of bundling and handset subsidies. This in
turn could result in higher churn rate, lower ARPU, slower subscriber growth and potentially
tighter operating margins. The imminent introduction of MNP is also expected to result in
greater price competition in the mobile market.
Although the Malaysian Group seeks to limit these risks through, inter alia, providing good
customer service, maintaining a large client base, keeping abreast with technology
progression to maintain its competitiveness in the market and implementing various strategies
to attract and retain subscribers, there is no assurance that such efforts will be successful.
In addition, the mobile market in Malaysia has experienced rapid growth in past years. The
mobile penetration rates in Malaysia has reached approximately 80% in 2006. While
penetration rates are expected to continue to grow, it is likely that growth rate will decline.
There is no assurance that Maxis would be able to maintain the subscriber growth or increase
its market share in Malaysia and this could have a material adverse effect on the Malaysian
Group’s business and prospects.
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(b)
Reliability and Expansion of its Network Infrastructure
The Malaysian Group provides mobile, fixed line and other services over networks that rely
to varying degrees on a common core network. The provision of services by the Malaysian
Group depends on the reliability of this integrated network which is in turn vulnerable to
damage or interruptions in operation due to natural disasters, fire, power loss,
telecommunications failure, network software flaws, transmission cable cuts, breaches of
security and similar events. Although efforts have been made to limit these risks through
various initiatives to improve the reliability of the network, there can be no assurance that
these efforts will be successful and any failure of this integrated network that results in a
major interruption in operations or provision of any service over prolonged periods could
have an adverse effect on the Malaysian Group’s business.
Further, the Malaysian Group’s ability to continue to maintain or increase its subscriber base
is dependent in part on its ability to expand and upgrade its network on a timely basis. The
continued expansion and upgrading of its network are subject to risks and uncertainties,
including the ability to procure a sufficient number of suitably located base station sites.
Where feasible, base station site sharing is actively pursued with other operators.
(c)
Non-obtaining of or Inability to Obtain Local Authority Approvals for Base Stations
The Malaysian Group has experienced local opposition to the building of certain base stations
because of concerns about alleged health risks. As a result of such opposition, the Malaysian
Group has in some instances been required by the local authorities to remove and relocate
certain base stations. Further, given the rapid deployment of base station sites required to
support network growth, a significant number of base stations have been installed while
pending submission to or approval from the local authorities. This is in line with common
practice among mobile operators in Malaysia given the long lead time generally required for
the approvals. The lack of approvals have in certain cases resulted in the local authorities
issuing notices and/or dismantling the base station which were then relocated. There can be
no assurance that the local authorities will not step up its enforcement in the future or that
actions by the local authorities in issuing notices and/or dismantling the base station will not
delay or disrupt the installation and operation of base stations, which could have an adverse
effect on the Malaysian Group’s business and operations.
(d)
Interconnection with Other Operators' Networks
Telekom Malaysia is the incumbent fixed line operator in Malaysia. The Malaysian Group’s
telephony services, like those of other operators, depend to a large extent on interconnection
with Telekom Malaysia's PSTN and the networks of other operators. To date, the Malaysian
Group has not experienced any material disruption under such interconnection arrangements.
However, any disruption under such interconnection arrangements in the future as a result of
natural events, accidents, failure by other operators to perform their contractual obligations or
regulatory, technological, competitive or other reasons could cause service disruptions, which
could have an adverse effect on the Malaysian Group’s business and operations.
(e)
Regulatory and Licensing Requirements
The Malaysian Group’s operations are subject to extensive regulation and jurisdiction of
numerous governmental agencies, including the Commission.
There is no assurance that introduction of new regulations, laws or measures or changes in
laws or regulations or the Commission’s policies in the future will not have an adverse effect
on the business and financial performance of the Malaysian Group, particularly if such
-5-
changes result in adjustment to interconnect rates or if the Malaysian Group is unable to
comply with the applicable regulations or terms.
Further there can be no assurance that a licence will be renewed or extended upon its expiry.
The failure to maintain or the non-renewal of any of the Malaysian Group’s
telecommunications licences may adversely affect the Malaysian Group’s financial condition
or results of operations.
(f)
Import Duty and Sales Tax Exemptions
Since December 1994, some of the Malaysian Group companies have been granted an import
duty and sales tax exemption on imported equipment and a sales tax exemption on local
materials. The Malaysian Group will continue to apply for these exemptions following the
expiry of the current exemption periods. However, there is no certainty that such exemptions
will be obtained in the future as such approvals are getting increasingly more difficult to
obtain. The loss of these exemptions would, individually or in the aggregate, have an adverse
effect on the Malaysian Group’s financial or business prospects. The current import duty
ranges from 0% to 30% and the sales tax is 10%.
(g)
Intellectual property protection
The popularity of the Malaysian Group’s products and services is dependent on the goodwill
associated with the “maxis” and “Hotlink” brand names. The Malaysian Group relies on a
combination of trademark, servicemark and domain name registrations, common law
copyright protection and contractual restrictions to establish and protect its brand names and
logos, marketing designs and internet domain names. There can be no assurance that the steps
taken by the Malaysian Group in this regard will adequately protect its intellectual property.
(h)
3G
The Malaysian Group, through its subsidiary UMTS, has been awarded the 3G Spectrum
Assignment for a duration of 15 years commencing from April 2003. The terms of the 3G
Spectrum Assignment requires the Malaysian Group to meet certain rollout obligations. The
Malaysian Group has experienced certain delays in the roll-out of its 3G network due to
uncertainties in the commercial viability, compatibility and availability of handsets. UMTS
has submitted an application to MCMC to defer its 3G rollout commitments pursuant to its
3G Spectrum Assignment in order to be more consistent with the market uptake of 3G
services. However, should the application be unsuccessful, there is the possibility that
the MCMC could impose a penalty, cancel or suspend the spectrum, the occurrence of which
could have a material adverse effect on the Malaysian Group’s business and operations.
As 3G is a relatively new technology, there is no assurance that 3G will be adopted en masse
by the market. No assurance can be given that failure by the market to adopt the 3G service
will not have an adverse effect on the Malaysian Group’s business and operations.
-6-
2.4
Considerations Relating to Overseas Operations
(a)
Competition from Incumbent Operators
The market for mobile telecommunications services in the Republic of India is competitive
especially from the established pan-Indian operators such as Airtel Limited, Hutchison Essar
Limited, Tata Teleservices Limited, Reliance Communications Ventures Limited and the state
owned Bharat Sanchar Nigam Limited, who pose a strong threat to Aircel Group’s operations
given their dominant presence especially in the circles which Aircel Group have either just
begun operations or have yet to begin operations.
Currently, the mobile market in Indonesia has 5 GSM 2G and 3G operators and also 5 CDMA
players. The top 3 incumbent mobile operators have a 84% market share and is dominated by
the longer established GSM operators like PT Telekomunikasi Selular, PT Indosat Tbk and
PT Excelcomindo Pratama Tbk. The 2 new GSM operators entering the market in 2007 are
NTS and PT Hutchison CP Telecommunications. The CDMA operators such as PT Bakrie
Telekom Tbk, PT Mobile-8 Telekom Tbk and PT Telkom Indonesia Tbk compete at the
lower end market segments.
(b)
Spectrum Availability
Spectrum is presently a scarce commodity in India and the telecommunications industry is
awaiting for the Ministry of Defence of India to free up some spectrum currently used by it.
While these are expected to be freed up by mid-2007, there is a likelihood of delay before
these spectrum will be made available by the regulators to all operators.
Without additional spectrum in the circles where Aircel Group has a stronghold i.e. Chennai
and Tamil Nadu, Aircel Group may not be able to improve on its network quality and
consequently maintain its momentum of capturing subscriber market share. As for the new
circles in which it has recently been granted licences to operate in, notwithstanding that Aircel
Group is only expected to launch its operations in late 2007, the lack of available spectrum
will most likely delay Aircel Group’s roll out in these circles.
(c)
Access to Resources
The Aircel Group has almost doubled its number of subscribers from March 2006 (when it
became a subsidiary of Maxis) to November 2006 from its existing operations. Having
launched its operations in 2 other circles towards the end of 2006 and having received
licences for another 14 circles, the Aircel Group must have access to and be able to maintain
the resources essential for its growth plans. A diverse and capable management team
supported by a team of highly skilled employees with the necessary expertise is paramount for
this purpose. Loss of its key management team as well as any inability to attract personnel
with the appropriate skills to implement and support its growth plans may adversely impact
Aircel Group’s business and growth potential.
(d)
Failure to Meet Licence and Spectrum Conditions
DWL was granted UAS licences from the DoT to provide cellular mobile service (“Service”)
in 7 circles effective from 21 April 2004. The terms and conditions of the UAS licences
require DWL to fulfil its roll out obligations which envisages commencement of Service in a
prescribed minimum coverage area within 1 year of the effective date i.e by 20 April 2005,
failing which DoT may impose liquidated damages up to a maximum of INR70 million
(equivalent to RM5.8 million). In addition, DWL is required to cover 50% of the minimum
coverage area by the third year from the effective date i.e. by 20 April 2007 for all 7 circles. If
-7-
the delay exceeds 52 weeks, DoT may terminate the licence, invoke the performance
guarantee and/or order the imposition of a financial penalty.
Although DWL has taken all necessary steps to commence Services in these circles and has
applied for spectrum in the required frequency with the relevant authorities and for point of
interconnect with Bharat Sanchar Nigam Limited (the incumbent operator controlled by DoT)
across the circles, there was delay in the process of allocation of spectrum and point of
interconnect. As such, DWL could not commence Service within the prescribed roll out
period provided in the UAS licences. As the delay in the grant of spectrum is an industrywide issue, any decision of the DoT to impose sanctions or penalties for roll-out delays will
have potential adverse impact on the telecommunications sector as a whole. Further, although
DWL has since commenced Service in the 7 circles, it has not obtained the necessary
certification from the DoT, which is required before the commencement of Service. DoT may
impose a penalty for such delay.
The combination of the above issues, if decided against DWL, could have a material adverse
effect on the business and prospects of DWL.
Licences and/or spectrum granted to NTS are also subject to conditions, including roll out
commitments. If such commitments are not met, the relevant authorities may impose a
penalty and/or revoke the licence or spectrum allocation, which would have a material
adverse effect on the business and prospects of NTS.
2.5
Further Considerations
The failure to obtain approvals as described in Section 2.3(c) of this Information
Memorandum or the action by the local authorities in issuing notices and/or dismantling the
base station or any events arising therefrom shall not constitute an event of default or
cancellation event or suspension event under the terms of the Programmes or under any
transaction documents in connection with the Programmes.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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3.
KEY FINANCIAL HIGHLIGHTS
The table below sets out the key financial highlights of the Group for the financial years
ended 31 December 2004 and 2005 and 9 months financial statement ended 30 September
2006:
Financial year ended
9 months @
30/09/2006
Unaudited
(RM’million)
31/12/2005
31/12/2004
Audited
(RM’million)
Audited
(RM’milion)
Revenue
Profit before Taxation
5,590
1,968
6,371
2,480
5,689
2,338
Net Profit
1,462
1,674
1,598
Property, Plant & Equipment
5,725
4,504
4,250
(1516)
1,419
365
Deposits with licensed banks
Cash & Bank Balances
Total of Deposits with licensed banks
and Cash & Bank Balances
2,732
90
2,822
3,415
62
3,477
2,172
66
2,238
Long Term Borrowings
Short Term Borrowings
Total Borrowings
823
2,294
3,117
538
264
802
418
190
608
Capital and Reserves
6,773
6,322
5,371
Net Current (Liabilities)/Assets
The audited financial statement of the Issuer for the financial year ended 31 December 2005
is set out in Appendix II of this Information Memorandum.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
-9-
4.
TERMS AND CONDITIONS OF CPs/MTNs
The CPs/MTNs are constituted by the CP/MTN Trust Deed entered or to be entered into between the
Issuer and the Trustee. The following summary of certain provisions of the CP/MTN Trust Deed does
not purport to be complete and is subject to, and is quantified in its entirety by reference to, the
provisions of the CP/MTN Trust Deed, including the definitions of certain terms therein. Whenever
particular sections or defined terms of the CP/MTN Trust Deed not otherwise defined herein are
referred to, such sections or defined terms are incorporated herein by reference.
GENERAL
1.1
The CP/MTN is part of one of several series of CPs/MTNs which may be issued by the Issuer
pursuant to the CPs/MTNs Issuance Facility Agreement and the Agency Agreement. The
CPs/MTNs constitute direct obligations of the Issuer ranking pari passu without any
preference among themselves.
1.2
The CP/MTN is issued with the benefit of the CP/MTN Trust Deed as security against default
in payment by the Issuer of the CP/MTN following due presentation in accordance with the
terms hereunder.
1.3
Copies of the CP/MTN Trust Deed, the Agency Agreement, Depository and Paying Agency
Agreement and a copy of the latest audited accounts of the Issuer are available for inspection,
review and assessment during normal office hours at the registered office of the Trustee.
1.4
Terms and expressions defined in the CP/MTN Trust Deed shall have the same meanings in
the CP/MTN except where the context so otherwise requires.
MATURITY DATE
2.
The Maturity Date is the date shown as such on the face of the CP/MTN provided that, if the
Maturity Date is not a Business Day, the Maturity Date shall be the date as prescribed in the
Code, which date shall not extend beyond 7 years from the date of the first issue of the
CPs/MTNs.
ISSUE AGENT, PAYING AGENT AND PAYMENTS
3.1
Pursuant to the Agency Agreement, the Issuer has appointed HSBC as Issue Agent. In acting
under the Agency Agreement and in connection with the CPs/MTNs, the Issue Agent will act
solely as the agent of the Issuer and not on behalf of the Noteholders of the CPs/MTNs.
3.2
Pursuant to the Depository and Paying Agency Agreement, the Issuer has appointed BNM as
the Central Depository and the Paying Agent. In acting under the Depository and Paying
Agency Agreement and in connection with the CPs/MTNs, the Paying Agent will act solely
as the agent of the Issuer and not on behalf of the Noteholders of the CPs/MTNs.
3.3
Subject to the provision of the Code, all payments to be made by the Issuer for the account of
any of the Noteholders shall, in accordance with the CP/MTN Trust Deed and the Depository
and Paying Agency Agreement be made by the Issuer in RM not later than 11.00 a.m. (Kuala
Lumpur time) on the relevant day to the Lead Arranger’s account with BNM or such other
bank and/or account as the Lead Arranger may have notified to the Issuer for the account of
the Lead Arranger who shall on or before 11.30 a.m.(Kuala Lumpur time) on the date of
- 10 -
receipt, remit the same to the Paying Agent’s account as provided in the Depository and
Paying Agency Agreement.
3.4
The Issuer or any of its related corporation (within the definition of the Act) may at any time
and from time to time purchase the CPs/MTNs at any price in the open market or by private
treaty.
Any CPs/MTNs held by or on behalf of the Issuer or its related corporation will not entitle the
Issuer or its related corporation to vote at any meetings of the Noteholders and will not be
deemed to be Outstanding for the purpose of:
3.5
(i)
constituting quorums at meetings of the Noteholders;
(ii)
determining the total votes exercisable by Noteholders whenever such determination
is required under the CP/MTN Trust Deed.
All payments in respect of the CP/MTN will be made in RM in same day funds either by RM
cheque or transfer at the option of the Noteholder to a RM account maintained by the
Noteholder.
ACCELERATED PAYMENT
4.1
Upon an Event of Default being declared pursuant to the CP/MTN Trust Deed, the CP/MTN
shall become immediately due and payable. The Trustee will procure that notice of any such
declaration is given to the Noteholder of the CP/MTN in accordance with paragraph 8 below.
4.2
The Issuer will indemnify the Noteholder against any reasonable costs which the Noteholder
may incur in connection with any proceedings to enforce any of the provisions of the
CP/MTN save and except arising from the willful misconduct, default, negligence or fraud by
the Noteholders.
TAXATION
5.
All payments by the Issuer shall be made without withholding or deductions for or on account
of any present or future tax, duty or charge of whatsoever nature imposed or levied by or on
behalf of Malaysia, or any authority thereof or therein having power to tax, unless such
withholding or deduction is required by law, in which event the Issuer shall gross up for any
such deductions or withholdings save and except that the Issuer will not be liable to gross up
for any withholding and/or additional tax payable by any Noteholder (i) who is a non-resident
(other than financial institutions and other institutions which come within the jurisdiction of
the Labuan Offshore Financial Services Authority); or (ii) where such payment is on the
Noteholder's overall net income and in any of such instance, any withholding and/or
additional tax payable will be borne by the Noteholder. The Paying Agent (in case of Global
Certificates) and the Issuer (in case of Definitive Certificates) shall be entitled to withhold or
deduct any tax that the Issuer is required by law to withhold or deduct from any payment by
the Issuer and shall not be liable to account to the Noteholders for any such withholding or
deduction.
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REPLACEMENT OF CP/MTN
6.
If the CP/MTN is mutilated, defaced, destroyed, lost or stolen, it may be replaced at the
specified office of the Issue Agent (a) subject to all applicable laws, (b) on payment by the
claimant of the expense of the Issuer and the Issue Agent, and any registration, stamp or other
tax, duty or charge incurred or payable in that connection; and (c) on such terms as to
evidence, security, indemnity and otherwise as the Issuer may reasonably require. If worn out
or defaced, the CP/MTN must be surrendered before a replacement will be issued.
PRESCRIPTION
7.
The CP/MTN will become void unless presented for payment within a period of 6 years from
the relevant due date for payment.
NOTICES
8.
All notices and documents to Noteholders will be sent by post PROVIDED THAT notices to
Noteholder may, notwithstanding any earlier provisions hereunder, be given by
advertisements published in national newspapers in main languages, published daily and
circulating generally throughout Malaysia, through any clearing systems through which
interest in the CPs/MTNs are held, by any means allowed under the Code or in such manner
as the Issuer and the Trustee may agree at any time and from time to time. Any such notice
shall be deemed to have been given, in the case of posting, on the third Business Day after
posting and in the case of publication, on the date of such publication under the relevant mode
of notification or, if published more than once or on different dates, on the first date on which
such publication is made.
INTEREST
9.
In relation to MTNs (where interest is payable in arrears), unless previously purchased by the
Issuer and cancelled, the Issuer shall pay interest on the Face Amount set out in such MTN at
a fixed rate to be determined by the Issuer at the point of issuance and as set out in the
relevant MTN and which shall be payable semi-annually in arrears (the “Interest Payment
Date”) and calculated on the basis of the actual number of days elapsed in a year of 365 days.
For the avoidance of doubt, each Interest Payment Date is subject to such adjustment as may
be prescribed by the CP/MTN Trust Deed.
DEFAULT INTEREST
10.
In the event of overdue payment of any amounts due under the CPs/MTNs, the Issuer shall
pay to the Noteholders additional interest on such overdue amounts at the rate of interest of
1.0% per annum above the prevailing rate on the amounts outstanding and unpaid calculated
from the relevant due date up to the date of full payment and such default interest shall accrue
for the number of days such payment is overdue on the basis of a year of 365 days.
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MEETINGS
11.
The CP/MTN Trust Deed contains provisions for convening meetings of Noteholders to
consider matters relating to the CPs/MTNs, including the modification of any provision of
these Conditions or the CP/MTN Trust Deed. Any such modification may be made if
sanctioned by a Special Resolution. Such a meeting may be convened by the Issuer or by the
Trustee and shall be convened by the Trustee upon the request in writing of Noteholders
holding in the aggregate not less than 10% of the aggregate Face Amount of the CPs/MTNs
for the time being Outstanding. The quorum at any meeting convened to vote on a Special
Resolution will be 2 or more persons holding or representing in the aggregate not less than
50% of the aggregate Face Amount of the CPs/MTNs remaining Outstanding at the date of
the meeting or, at any adjourned meeting, 2 or more persons holding or representing in
aggregate not less than 25% of the aggregate Face Amount of the CPs/MTNs remaining
Outstanding at the date of the adjourned meeting, provided however, that any proposals for a
Reserved Matter may only be sanctioned by a Special Resolution passed at a meeting of
Noteholders at which 2 or more persons holding or representing in the aggregate not less than
75% or, at any adjourned meeting, 25% of the aggregate Face Amount of the CPs/MTNs
remaining Outstanding at the date of the meeting or the adjourned meeting, as the case may
be, shall form a quorum. Except for the purpose of passing a Special Resolution, at any
meeting, at least 2 or more persons being Noteholders present in person or proxy and holding
or representing in the aggregate not less than 33% of the aggregate Face Amount of the
CPs/MTNs remaining Outstanding at the date of the meeting shall form a quorum for the
transaction of business. Any resolution duly passed at any such meeting of Noteholders shall
be binding on all the Noteholders, whether present or not.
EVENTS OF DEFAULT
12.
The Events of Default are set out in Clause 8.1 of the CP/MTN Trust Deed and includes nonpayment of Face Amount or interest under the CPs/MTNs as and when the same shall become
due. If any of the Events of Default occurs, then the Trustee, in relation to Clause 8.1(a) of the
CP/MTN Trust Deed shall and in relation to Clause 8.1(b) to (n) of the CP/MTN Trust Deed,
at its discretion may, and if so requested in writing by Noteholders by a Special Resolution
shall, (subject to the Trustee having been indemnified or provided with security to its
satisfaction) give written notice to the Issuer declaring that an Event of Default has occurred
whereupon, inter alia, notwithstanding the stated maturity of the CPs/MTNs, the CPs/MTNs
shall mature and become immediately due and payable at their respective Face Amount
together with accrued interest without further action or formality.
GOVERNING LAW
13.
The CP/MTN is governed by, and shall be construed in accordance with the laws of Malaysia.
STAMP DUTY EXEMPTION
14.
For the purpose of the Stamp Duty Exemption (No. 23) Order 2000, IT IS HEREBY
DECLARED that the CP/MTN constitutes one of the several instruments employed in
RM500.0 million bearer CPs/MTNs to be issued by the Issuer pursuant to the Notes Issuance
Facility Agreement and the other Transaction Documents.
- 13 -
5.
TERMS AND CONDITIONS OF MTNs
The MTNs are constituted by the MTN Trust Deed entered or to be entered into between the Issuer
and the Trustee. The following summary of certain provisions of the MTN Trust Deed does not
purport to be complete and is subject to, and is quantified in its entirety by reference to, the
provisions of the MTN Trust Deed, including the definitions of certain terms therein. Whenever
particular sections or defined terms of the MTN Trust Deed not otherwise defined herein are referred
to, such sections or defined terms are incorporated herein by reference.
GENERAL
1.1
The MTN is part of one of several series of MTNs which may be issued by the Issuer
pursuant to the MTNs Issuance Facility Agreement and the Agency Agreement. The MTNs
constitute direct obligations of the Issuer ranking pari passu without any preference among
themselves.
1.2
The MTN is issued with the benefit of the MTN Trust Deed as security against default in
payment by the Issuer of the MTN following due presentation in accordance with the terms
hereunder.
1.3
Copies of the MTN Trust Deed, the Agency Agreement, the Depository and Paying Agency
Agreement and a copy of the latest audited accounts of the Issuer are available for inspection,
review and assessment during normal office hours at the registered office of the Trustee.
1.4
Terms and expressions defined in the MTN Trust Deed shall have the same meanings in the
MTN except where the context so otherwise requires.
MATURITY DATE
2.
The Maturity Date is the date shown as such on the face of the MTN provided that, if the
Maturity Date is not a Business Day, the Maturity Date shall be the date as prescribed in the
RENTAS Rules, which date shall not extend beyond 30 years from the date of the first issue
of the MTNs.
ISSUE AGENT, PAYING AGENT AND PAYMENTS
3.1
Pursuant to the Agency Agreement, the Issuer has appointed HSBC as Issue Agent. In acting
under the Agency Agreement and in connection with the MTNs, the Issue Agent will act
solely as the agent of the Issuer and not on behalf of the Noteholders of the MTNs.
3.2
Pursuant to the Depository and Paying Agency Agreement, the Issuer has appointed BNM as
the Central Depository and the Paying Agent. In acting under the Depository and Paying
Agency Agreement and in connection with the MTNs, the Paying Agent will act solely as the
agent of the Issuer and not on behalf of the Noteholders of the MTNs.
3.3
Subject to the provision of the Code, all payments to be made by the Issuer for the account of
any of the Noteholders shall, in accordance with the MTN Trust Deed and the Depository and
Paying Agency Agreement be made by the Issuer in RM not later than 11.00 a.m. (Kuala
Lumpur time) on the relevant day to the Lead Arranger’s account with BNM or such other
bank and/or account as the Lead Arranger may have notified to the Issuer for the account of
the Lead Arranger who shall on or before 11.30 a.m. (Kuala Lumpur time) on the date of
- 14 -
receipt, remit the same to the Paying Agent’s account as provided in the Depository and
Paying Agency Agreement.
3.4
The Issuer or any of its related corporation (within the definition of the Act) may at any time
and from time to time purchase the MTNs at any price in the open market or by private treaty.
Any MTNs held by or on behalf of the Issuer or its related corporation will not entitle the
Issuer or its related corporation to vote at any meetings of the Noteholders and will not be
deemed to be Outstanding for the purpose of:
3.5
(i)
constituting quorums at meetings of the Noteholders;
(ii)
determining the total votes exercisable by Noteholders whenever such determination
is required under the MTN Trust Deed.
All payments in respect of the MTNs will be made in RM in same day funds either by RM
cheque or transfer at the option of the Noteholders, to a RM account maintained by the
Noteholder.
ACCELERATED PAYMENT
4.1
Upon an Event of Default being declared pursuant to the MTN Trust Deed, the MTN shall
become immediately due and payable. The Trustee will procure that notice of any such
declaration is given to the Noteholder of the MTN in accordance with paragraph 8 below.
4.2
The Issuer will indemnify the Noteholder against any reasonable costs which the Noteholder
may incur in connection with any proceedings to enforce any of the provisions of the MTN
save and except arising from the willful misconduct, default, negligence or fraud by the
Noteholders.
TAXATION
5.
All payments by the Issuer shall be made without withholding or deductions for or on account of
any present or future tax, duty or charge of whatsoever nature imposed or levied by or on behalf
of Malaysia, or any authority thereof or therein having power to tax, unless such withholding or
deduction is required by law, in which event the Issuer shall gross up for any such deductions or
withholdings save and except that the Issuer will not be liable to gross up for any withholding
and/or additional tax payable by any Noteholder (i) who is a non-resident (other than financial
institutions and other institutions which come within the jurisdiction of the Labuan Offshore
Financial Services Authority); or (ii) where such payment is on the Noteholder's overall net
income and in any of such instance, any withholding and/or additional tax payable will be borne
by the Noteholder. The Paying Agent (in case of Global Certificates) and the Issuer (in case of
Definitive Certificates) shall be entitled to withhold or deduct any tax that the Issuer is
required by law to withhold or deduct from any payment by the Issuer and shall not be liable
to account to the Noteholders for any such withholding or deduction.
- 15 -
REPLACEMENT OF MTN
6.
If the MTN is mutilated, defaced, destroyed, lost or stolen, it may be replaced at the specified
office of the Issue Agent (a) subject to all applicable laws; (b) on payment by the claimant of
the expense of the Issuer and the Issue Agent, and any registration, stamp or other tax, duty or
charge incurred or payable in that connection; and (c) on such terms as to evidence, security,
indemnity and otherwise as the Issuer may reasonably require. If worn out or defaced, the
MTN must be surrendered before a replacement will be issued.
PRESCRIPTION
7.
The MTN will become void unless presented for payment within a period of 6 years from the
relevant due date for payment.
NOTICES
8.
All notices and documents to Noteholders will be sent by post PROVIDED THAT notices to
Noteholder may, notwithstanding any earlier provisions hereunder, be given by
advertisements published in national newspapers in main languages, published daily and
circulating generally throughout Malaysia, through any clearing systems through which
interest in the MTNs are held, by any means allowed under the Code or in such manner as the
Issuer and the Trustee may agree at any time and from time to time. Any such notice shall be
deemed to have been given, in the case of posting, on the third Business Day after posting and
in the case of publication, on the date of such publication under the relevant mode of
notification or, if published more than once or on different dates, on the first date on which
such publication is made.
INTEREST
9.
In relation to the MTNs (where interest is payable in arrears), the Issuer shall pay interest on
the Face Amount set out in such MTN at a fixed rate to be determined by the Issuer at the
point of issuance and as set out in the relevant MTN and which shall be payable semiannually in arrears (the “Interest Payment Date”) and calculated on the basis of the actual
number of days elapsed in a year of 365 days.
For the avoidance of doubt, each Interest Payment Date is subject to such adjustment as may
be prescribed by the MTN Trust Deed.
DEFAULT INTEREST
10.
In the event of overdue payment of any amounts due under the MTNs, the Issuer shall pay to
the Noteholders additional interest on such overdue amounts at the rate of interest of 1.0% per
annum above the prevailing rate on the amounts outstanding and unpaid calculated from the
relevant due date up to the date of full payment and such default interest shall accrue for the
number of days such payment is overdue on the basis of a year of 365 days.
- 16 -
MEETINGS
11.
The MTN Trust Deed contains provisions for convening meetings of Noteholders to consider
matters relating to the MTNs, including the modification of any provision of these Conditions
or the MTN Trust Deed. Any such modification may be made if sanctioned by a Special
Resolution. Such a meeting may be convened by the Issuer or by the Trustee and shall be
convened by the Trustee upon the request in writing of Noteholders holding in the aggregate
not less than 10% of the aggregate Face Amount of the MTNs for the time being Outstanding.
The quorum at any meeting convened to vote on a Special Resolution will be 2 or more
persons holding or representing in the aggregate not less than 50% of the aggregate Face
Amount of the MTNs remaining Outstanding at the date of the meeting or, at any adjourned
meeting, 2 or more persons holding or representing in aggregate not less than 25% of the
aggregate Face Amount of the MTNs remaining Outstanding at the date of the adjourned
meeting, provided however, that any proposals for a Reserved Matter may only be sanctioned
by a Special Resolution passed at a meeting of Noteholders at which 2 or more persons
holding or representing in the aggregate not less than 75% or, at any adjourned meeting, 25%
of the aggregate Face Amount of the MTNs remaining Outstanding at the date of the meeting
or adjourned meeting, as the case may be, shall form a quorum. Except for the purpose of
passing a Special resolution, at any meeting, at least 2 or more persons being Noteholders
present in person or proxy and holding or representing in the aggregate not less than 33% of
the aggregate Face Amount of the MTNs remaining Outstanding at the date of the meeting
shall form a quorum for the transaction of business. Any resolution duly passed at any
meeting of Noteholders shall be binding on all the Noteholders, whether present or not.
EVENTS OF DEFAULT
12.
The Events of Default are set out in Clause 8.1 of the MTN Trust Deed and includes nonpayment of Face Amount or interest under the MTNs as and when the same shall become due.
If any of the Events of Default occurs, then the Trustee, in relation to Clause 8.1(a) of the
MTN Trust Deed shall and in relation to Clause 8.1(b) to (n) of the MTN Trust Deed, at its
discretion may, and if so requested in writing by Noteholders by a Special Resolution shall,
(subject to the Trustee having been indemnified or provided with security to its satisfaction)
give written notice to the Issuer declaring that an Event of Default has occurred whereupon,
inter alia, notwithstanding the stated maturity of the MTNs, the MTNs shall mature and
become immediately due and payable at their respective Face Amount together with accrued
interest without further action or formality.
GOVERNING LAW
13.
The MTN is governed by, and shall be construed in accordance with the laws of Malaysia.
STAMP DUTY EXEMPTION
14.
For the purpose of the Stamp Duty Exemption (No. 23) Order 2000, IT IS HEREBY
DECLARED that the MTN constitutes one of the several instruments employed in RM500.0
million bearer MTNs to be issued by the Issuer pursuant to the Notes Issuance Facility
Agreement and the other Transaction Documents.
- 17 -
6.
RATINGS
As at the date of this Information Memorandum, RAM has assigned a short term rating of P1 and a
long term rating of AAA to the CP/MTN Programme and a long term rating of AAA to the MTN
Programme.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
- 18 -
7.
UTILISATION OF PROCEEDS
The Issuer will utilise the proceeds to refinance existing debt of the Malaysian Group, to finance
capital expenditure of the Malaysian Group which include purchase of equipment, software and
financing of construction/installation cost for the network in Malaysia and for other general funding
requirements and general corporate purposes of the Malaysian Group.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
- 19 -
8.
8.1
BACKGROUND INFORMATION ON MAXIS
Corporate Information
Maxis was incorporated as a private limited company in Malaysia under the name Binariang
Sdn Bhd on 19 December 1986 under the Companies Act, 1965. On 5 September 1997,
Maxis was converted to a public limited company and changed its name to Binariang Berhad.
Maxis assumed its present name, Maxis Communications Berhad, on 12 July 1999. On 8 July
2002, Maxis’ shares were listed on the Main Board of the Bursa Securities.
The principal activities of Maxis are that of a holder of investments and a provider of services
to its Subsidiaries. The principal activities of the Group are that of a mobile services provider,
a fixed services provider and an international gateway services provider.
Maxis completed its acquisition of 51% equity interest in NTS and 74% equity interest in
Aircel in April 2005 and March 2006 respectively. Aircel is principally engaged in the
business of providing cellular services, and together with its subsidiaries ACL and DWL,
have operations in several circles in the Republic of India. NTS is principally engaged in the
business of providing mobile telecommunications services in Indonesia and is currently
preparing for commercial launch of its services.
8.2
Share Capital
8.2.1
Authorised, Issued and Paid-up Capital as at 30 November 2006
Share Capital
Authorised
20,000,000,000 ordinary shares of RM0.10 each
RM
2,000,000,000
Issued and fully paid-up
2,515,419,000 ordinary shares of RM0.10 each fully paid-up
8.2.2
251,541,900
Substantial Shareholders of Maxis
The substantial shareholders (holding 5% or more of the shares) of Maxis and their respective
shareholdings in Maxis based on the Register of Substantial Shareholders of Maxis as at 30
November 2006 are as follows:
Names of Substantial Shareholders
as at 30 November 2006
--------------------------No. of shares held-----------------
Direct
%
Indirect
%
Maxis Holdings Sdn Bhd
397,849,171
15.82
-
-
Global Multimedia Technologies
(BVI) Ltd
-
-
397,849,171(1)
15.82
East Asia Telecommunications Ltd
-
-
397,849,171(1)
15.82
Worldwide Communications
Technologies Ltd
-
-
397,849,171(1)
15.82
- 20 -
Names of Substantial Shareholders
as at 30 November 2006
--------------------------No. of shares held-----------------
Direct
%
Indirect
%
Eridanes International N.V.
-
-
397,849,171(2)
15.82
Pacific Fortune Sdn Bhd
-
-
167,378,718(3)
6.65
MAI Holdings Sdn Bhd
-
-
167,378,718(4)
6.65
Wilayah Resources Sdn Bhd
133,901,584
5.32
-
-
Wilayah Bintang Sdn Bhd
-
-
133,901,584(5)
5.32
Tegas Puri Sdn Bhd
167,378,718
6.65
-
-
Tegas Mahsuri Sdn Bhd
-
-
167,378,718(6)
6.65
Besitang Barat Sdn Bhd
133,901,583
5.32
-
-
Besitang (M) Sdn Bhd
-
-
133,901,583(7)
5.32
Usaha Tegas Equity Sdn Bhd
-
-
552,346,060(8)
21.96
UTSB
-
-
552,346,060(9)
21.96
Pacific States Investment Limited
-
-
552,346,060(10)
21.96
Excorp Holdings N.V.
-
-
552,346,060(11)
21.96
PanOcean Management Limited
-
-
552,346,060(11)
21.96
Ananda Krishnan Tatparanandam
-
-
1,177,305,974(12)
46.80
Harapan Nusantara Sdn Bhd
-
-
329,775,665(13)
13.11
Tun Haji Mohammed Hanif bin
Omar
100,000
0.004
331,775,665(14)
13.19
Dato’ Haji Badri bin Haji Masri
-
-
329,775,665(14)
13.11
Mohamad Shahrin bin Merican
130,000
0.0052
329,775,665(14)
13.11
Hj. Affendi bin Tun Hj Mohd Fuad
Stephens
-
-
329,775,665(14)
13.11
Franklin Resource Inc.
-
-
132,853,100(16)
5.28
Templeton Worldwide Inc
-
-
132,853,100(16)
5.28
Templeton International Inc
-
-
132,853,100(16)
5.28
Templeton Asset Management Ltd
-
-
132,853,100(16)
5.28
EPF
119,475,700
4.75
18,456,200(17)
0.73
&(15)
- 21 -
Notes:
(1)
Deemed to have an interest by virtue of its direct interest in Maxis Holdings Sdn. Bhd. (“MHSB”).
(2)
Eridanes International N.V. (“EINV”) is deemed to have an interest in the shares in Maxis held by
MHSB by virtue of EINV being entitled to exercise 100% of the votes attached to the voting shares in
each of Global Multimedia Technologies (BVI) Ltd (“GMT”), East Asia Telecommunications Ltd
(“EAT”) and Worldwide Communications Technologies Ltd (“WCT”).
(3)
Pacific Fortune Sdn. Bhd (“PFSB”)’s deemed interest in the shares in Maxis arises by virtue of its direct
equity interest of 100% each in Ria Utama Sdn. Bhd. (“RUSB”) and Tetap Emas Sdn. Bhd. (“TESB”)
respectively (collectively, “PFSB Subsidiaries”). The PFSB Subsidiaries hold in aggregate 6.65% direct
equity interest in Maxis.
(4)
MAI Holdings Sdn. Bhd. (“MAIH”) is deemed to have an interest in all of the shares in Maxis in which
PFSB has an interest, by virtue of MAIH’s direct equity interest of 100% in PFSB. See Note (3) above.
(5)
Wilayah Bintang Sdn Bhd is deemed to have an interest in all of the shares in Maxis held by Wilayah
Resources Sdn Bhd by virtue of its direct equity interest in Wilayah Resources Sdn. Bhd.
(6)
Tegas Mahsuri Sdn Bhd is deemed to have an interest in all of the shares in Maxis held by Tegas Puri
Sdn Bhd by virtue of its direct equity interest in Tegas Puri Sdn Bhd.
(7)
Besitang (M) Sdn Bhd is deemed to have an interest in all of the shares in Maxis held by Besitang Barat
Sdn Bhd by virtue of its direct equity interest in Besitang Barat Sdn. Bhd.
(8)
Usaha Tegas Equity Sdn Bhd (“UTES”)’s deemed interest in the shares in Maxis arises by virtue of its
direct equity interests of 100% each in Wilayah Bintang Sdn Bhd, Tegas Mahsuri Sdn Bhd, Besitang (M)
Sdn Bhd and Besitang Utara Sdn Bhd which are the holding companies of Wilayah Resources Sdn Bhd,
Tegas Puri Sdn Bhd, Besitang Barat Sdn Bhd and Besitang Selatan Sdn Bhd (collectively, “UT
Subsidiaries”). The UT Subsidiaries hold in aggregate 21.96% direct equity interest in Maxis. See Notes
(5) to (7) above.
(9)
UTSB is deemed to have an interest in all of the shares in Maxis in which UTES has an interest, by
virtue of UTSB being entitled to exercise 100% of the votes attached to the voting shares of UTES. See
Note (8) above.
(10)
Pacific States Investment Limited (“PSIL”) is deemed to have an interest in all of the shares in Maxis in
which UTSB has an interest, by virtue of PSIL being entitled to exercise 99.99% of the votes attached to
the voting shares of UTSB. See Note (9) above.
(11)
The shares in PSIL are held by Excorp Holdings N.V. (“Excorp”) which is in turn held by PanOcean
Management Limited (“PanOcean”). PanOcean is the trustee of a discretionary trust, the beneficiaries of
which are members of the family of Ananda Krishnan Tatparanandam (“TAK”) and foundations
including those for charitable purposes. Although PanOcean and TAK are deemed to have an interest in
the shares in Maxis in which PSIL has an interest, they do not have any economic or beneficial interest
over such shares, as such interest is held subject to the terms of the discretionary trust.
(12)
TAK is deemed to have an interest by virtue of:
(13)
(i)
his controlling interest in MAI Sdn Berhad, the immediate holding company of Terang Equity
Sdn Bhd which in turn has a direct equity interest of 100% in Wangi Terang Sdn Bhd;
(ii)
his controlling interest in MAIH, the immediate holding company of PFSB which in turn has a
direct equity interest of 100% each in RUSB and TESB respectively. See Note (4) above;
(iii)
the deemed interest of PanOcean. See Note (11) above; and
(iv)
his controlling interest in EINV, the immediate holding company of EAT, GMT and WCT which
in turn collectively hold shares in MHSB. See Note (2) above.
Harapan Nusantara Sdn Bhd (“Harapan Nusantara”) is deemed to have an interest in all of the shares in
Maxis in which Mujur Anggun Sdn Bhd, Cabaran Mujur Sdn Bhd, Anak Samudra Sdn Bhd, Dumai
Maju Sdn Bhd, Nusantara Makmur Sdn Bhd, Usaha Kenanga Sdn Bhd and Tegas Sari Sdn Bhd (the
“Harapan Nusantara Subsidiaries”) have an interest, by virtue of Harapan Nusantara being entitled to
control the exercise of 100% of the votes attached to the voting shares in each of the Harapan Nusantara
Subsidiaries. The Harapan Nusantara Subsidiaries hold their respective interests in Maxis as trustees
- 22 -
under discretionary trusts for Bumiputera objects. As such, Harapan Nusantara does not have any
economic interest in these shares held by the Harapan Nusantara Subsidiaries as such interest is held
subject to the terms of the discretionary trusts for Bumiputera objects.
(14)
Deemed to have an interest in the shares in Maxis in which Harapan Nusantara has an interest, by virtue
of his 25% direct equity interest in Harapan Nusantara. See Note (13) above. However, he does not have
any economic interest in the shares held by the Harapan Nusantara Subsidiaries as such interest is held
subject to the terms of the discretionary trusts for Bumiputera objects.
(15)
Tun Haji Mohammed Hanif bin Omar is deemed to have an interest over an additional 2,000,000 shares
in Maxis held by Dian Tiara Sdn Bhd (“DTSB”) by virtue of his direct equity interest of 99% in DTSB.
(16)
Templeton Asset Management Ltd is a wholly-owned subsidiary of Templeton International, Inc. which
is a wholly-owned subsidiary of Templeton Worldwide Inc, which in turn is a wholly-owned subsidiary
of Franklin Resources Inc. Deemed to have an interest in 132,853,100 ordinary shares of RM0.10 each in
Maxis (“Maxis Shares”) held through the nominees.
(17)
The EPF is deemed to have an interest in 18,456,200 Maxis Shares held through the following registered
holders:
(i)
Aberdeen Asset Management Sdn Bhd in respect of 650,500 Maxis Shares;
(ii)
Alliance Capital Asset Management Sdn Bhd in respect of 700,200 Maxis Shares;
(iii)
Amlnvestment Management Sdn Bhd in respect of 1,662,900 Maxis Shares;
(iv)
CIMB-Principal Asset Management Bhd in respect of 1,073,300 Maxis Shares;
(v)
Hwang DBS Asset Management (M) Sdn Bhd in respect of 168,700 Maxis Shares;
(vi)
Mayban Investment Management Sdn Bhd in respect of 3,000,000 Maxis Shares;
(vii)
Nomura Asset Management (S’pore) Ltd. in respect of 4,813,700 Maxis Shares;
(viii) RHB Asset Management Sdn Bhd in respect of 1,986,900 Maxis Shares; and
(ix)
PHEIM Asset Management Sdn Bhd in respect of 4,400,000 Maxis Shares.
8.3
Material Subsidiaries of Maxis
8.3.1
The Material Subsidiaries of Maxis as at 30 November 2006 are as follows:
Name of company
Date and
place of
incorporation
Issued and
paid-up
share capital
RM
Equity
interest
Principal activities
%
Maxis International
12.5.1992
Malaysia
2,570,002(1)
100
Operator of an international
gateway.
Maxis Broadband
12.2.1992
Malaysia
1,000,002
100
Operator of a national
public switched network
and provider of internet and
internet application services
and
include
owning,
maintaining, building and
operating radio facilities
and associated switches.
- 23 -
Name of company
Malaysian Mobile
8.3.2
Date and
place of
incorporation
20.7.1981
Malaysia
Issued and
paid-up
share capital
RM
Equity
interest
1,293,884,000
100
Principal activities
%
Provider
of
mobile
telecommunications
products and services.
In addition, the following Subsidiaries are material to the business of the Group for the
reasons set out in the Notes below:
Name of
company
Date and
place of
incorporation
Issued and
paid-up
share capital
Effective
Equity
interest
%
UMTS(2)
17.7.2000
Malaysia
RM100,000,000(3)
75
via AWT
Aircel(4)
20.12.1994
India
INR2,432,432,430
74
via GCSHL
Providing
services.
cellular
ACL(5)
21.2.1992
India
INR490,000,000
74
Providing
services.
cellular
DWL(6)
10.3.1998
India
INR297,981,300
74
Providing cellular and
enterprise services and
solutions.
NTS(7)
2.10. 2000
Indonesia
IDR1,433,606,613,500
51
via TG
Provider of mobile
telecommunications
services.
Principal activities
Provider of wireless
multimedia services.
Notes:
(1)
The issued and paid-up capital of Maxis International is made up of 2,500,002 ordinary shares of
RM1.00 each and 70,000 cumulative redeemable preference shares of RM1.00 each.
(2)
UMTS is the holder of a 3G spectrum assignment awarded by the Commission.
(3)
The issued and paid-up capital of UMTS is made up of 2,500,002 ordinary shares of RM1.00 each and
97,499,998 non-cumulative convertible redeemable preference shares RM1.00 each.
(4)
Based on the unaudited financial statement for the 9 months ending 30 September 2006, Aircel has
tangible net assets representing more than 5% of Consolidated Net Tangible Assets of Maxis and annual
turnover representing more than 5% of consolidated turnover of Maxis.
(5)
ACL is the wholly-owned subsidiary of Aircel which has operations in Chennai.
(6)
DWL is the wholly-owned subsidiary of Aircel which has operations in several circles in India.
(7)
Maxis has 51% equity interest in NTS via TG which is principally engaged in the business of providing
mobile telecommunications services in Indonesia.
- 24 -
8.4
Directors
The Board of Directors of Maxis as at 30 November 2006 is as follows:
(a)
Tan Sri Dato’ Megat Zaharuddin Bin Megat Mohd Nor;
(b)
Dato’ Jamaludin Bin Ibrahim;
(c)
Tan Sri Dato’ Seri Syed Anwar Jamalullail (as per his identity card is Syed Zainol
Anwar);
(d)
Augustus Ralph Marshall;
(e)
Tan Poh Ching(1);
(f)
Chan Chee Beng; and
(g)
Robert William Boyle.
Note:
(1)
8.4.1
Tan Poh Ching has resigned as Director of Maxis with effect from 1 January 2007.
Profiles of Directors
The profiles of the Directors of Maxis as at 30 November 2006 are as follows:
(a)
Tan Sri Dato’ Megat Zaharuddin Bin Megat Mohd Nor, aged 57, a Malaysian, was
appointed as Chairman and Director to the Board on 1 January 2004. He holds a B. Sc.
(Honours) in Mining Engineering from The Royal School of Mines, Imperial College of
Science and Technology, London University, United Kingdom (1972), and is an Associate of
The Royal School of Mines.
He is the Chairman of Mayban General Assurance Berhad, Mayban Life Assurance Berhad,
Malaysia National Insurance Berhad, Mayban Takaful Berhad, Takaful Nasional Sdn Bhd and
Mayban Life International (Labuan) Ltd, and also sits on the boards of Malayan Banking
Berhad, Mayban Fortis Holdings Berhad, MNI Holdings Berhad, MNI Offshore (L) Ltd, MNI
Life International (L) Ltd and Labuan International Offshore Financial Center Advisory
Panel.
In January 2004, he retired as the Regional CEO and Managing Director of Shell Exploration
and Production B.V., based in The Hague, Netherlands, a position he held since 1999.
From 1995 to 1999, Tan Sri Dato’ Megat was the Chairman and Chief Executive of Shell
Companies in Malaysia. During this period, he also sat on the boards of directors of MIMOS,
the National Information Technology Council, Universiti Malaysia Sarawak, Danaharta and
was also the Chairman of the National Science Centre.
- 25 -
(b)
Dato’ Jamaludin Bin Ibrahim(1), aged 47, a Malaysian, was appointed to the Board on 23
April 2002 and was appointed CEO of Maxis in October 1998. He has been with Maxis since
1997.
He attended Maktab Sultan Abu Bakar before graduating in 1978 from California State
University, United States with a B.Sc. in Business Administration and a minor in
Mathematics. He obtained his Masters in Business Administration from Portland State
University, Oregon in 1980, specializing in Quantitative Methods.
In Malaysia, Dato’ Jamaludin is the Chairman of the Advisory Board of the National Science
Centre. Internationally, he is a board member of Bridge Mobile Pte. Ltd, a strategic alliance
of 9 regional telecommunications providers. He had previously served as board member of
the World GSM Association until December 2004; Malaysia Venture Capital Management
Berhad, a Government-owned venture capital firm until August 2005; and HeiTech Padu
Berhad from August 2000 to January 2006.
Prior to Maxis, Dato’ Jamaludin was the Managing Director and CEO of Digital Equipment
(M) Sdn Bhd from 1993 to 1997. Preceding that he spent 12 years in IBM Malaysia, initially
as a systems engineer and subsequently in various positions in sales, marketing and support.
His last position was a Division Manager. He lectured for a year at California State
University, United States in 1981.
He was inducted into the Hall of Fame for Services to the Mobile Telecommunications
Industry by ASIAN MOBILE NEWS in Singapore in June 2004, and was named Malaysia’s
CEO of the Year 2000 by American Express Corporate Services in the Business Times in
November 2001.
Note:
(1)
(c)
Dato’ Jamaludin Bin Ibrahim was redesignated as “Group CEO” with effect from 5 December 2006.
Tan Sri Dato’ Seri Syed Anwar Jamalullail (as per his identity card is Syed Zainol
Anwar), aged 54, a Malaysian, was appointed to the Board on 18 May 2002. He is a
Chartered Accountant and Certified Practising Accountant, Australia. He holds a Bachelor of
Arts (Accounting) degree from Macquarie University, Sydney, Australia.
He is the Chairman of DRB-Hicom Berhad, EON Capital Berhad, Cahya Mata Sarawak
Berhad, Uni.Asia Life Assurance Berhad and Uni.Asia General Insurance Berhad. He also sits
on the boards of Nestle (Malaysia) Berhad, HICOM Berhad, HICOM Holdings Berhad and
various private companies. In September 2001, he was appointed Chairman of the Investment
Panel of Lembaga Tabung Haji.
He started his career as a financial accountant with Malaysia Airlines System Berhad in 1975,
then joined Price Waterhouse (Australia) as Senior Auditor in 1979. 3 years later he joined D
& C Nomura Merchant Bank Berhad as Manager, Investment. In 1985, he joined Amanah
Merchant Bank Berhad as Manager, Corporate Finance. After pursuing his own business from
1989 to October 1998, he joined Amanah Capital Partners Berhad as Group Managing
Director, resigning on 1 March 2002. He served as the Chairman of Malaysian Resources
Corporation Berhad and Media Prima Berhad until his resignation on 12 January 2005 and 12
March 2005 respectively.
- 26 -
(d)
Augustus Ralph Marshall, aged 55, a Malaysian, was appointed to the Board on 30 June
1993. He is an Associate of the Institute of Chartered Accountants in England and Wales, and
a Member of the Malaysian Institute of Certified Public Accountants and has more than 30
years’ experience in financial and general management.
He is currently the Deputy Chairman and Group CEO of Astro(2) (listed on the Bursa
Securities) which is a leading regional cross-media operator; Executive Director of Tanjong
(listed on the Bursa Securities and the London Stock Exchange plc), which is involved in
power generation, gaming and leisure and an Executive Director of UTSB which has
significant interests in the aforesaid companies.
His other directorships include MEASAT Global Berhad (listed on the Bursa Securities),
which is the owner and operator of the MEASAT satellite system; KLCC Property Holdings
Berhad (listed on the Bursa Securities), a property investment holding company and Arnhold
Holdings Limited (listed on The Stock Exchange of Hong Kong Limited), which is involved
in supplying products for the building and construction industry.
Note:
(2)
(e)
Augustus Ralph Marshall relinquished his positions as Deputy Chairman and Group CEO and assumed
the role of the Executive Deputy Chairman with effect from 1 February 2007.
Chan Chee Beng, aged 51, a Malaysian, was appointed to the Board on 7 June 2004. He
holds a Degree in Economics and Accounting and is a Fellow of the Institute of Chartered
Accountants in England and Wales. He has more than 27 years of experience in investment
banking, financial management and accounting including stints with Ernst & Young and
Morgan Grenfell & Co. Ltd.
His other directorships include Powertek Berhad, a wholly-owned subsidiary of Tanjong,
UTSB (which has significant interests in Maxis, Tanjong and Astro) and Bumi Armada
Berhad Group.
(f)
Robert William Boyle, aged 58, a British citizen, was appointed to the Board on 23 August
2006. He holds an MA in Law from Oxford and is a Fellow of the Institute of Chartered
Accountants of England and Wales.
He is a retired senior partner of PricewaterhouseCoopers, London (“PwC”) with experience
of leading and participating in global terms on client and PwC projects. He specialised in
audits and deal related advice to multi-nationals and held a variety of management positions
including Chairman of the Entertainment and Media Industry group for Europe, Middle East
and Africa and the United Kingdom Telecommunications Industry Group.
Prior to PwC London, he was also a partner of Coopers & Lybrand, Tanzania from 1979 to
1982. He was seconded to the Civil Service as Company Analyst in the Price Commission in
1976. From 1972 to 1974, he was seconded to Coopers & Lybrand in Paris following
qualification in London.
- 27 -
8.4.2
Directors’ Shareholdings in Maxis
The Directors’ shareholdings in Maxis as at 30 November 2006 are as follows:
Name
No. of ordinary shares
of RM0.10 each
Direct
Indirect
-
Direct
-
Tan Sri Dato’ Seri Syed Anwar Jamalullail
9,000
0.0004
Chan Chee Beng
-
-
-
-
Augustus Ralph Marshall
500,000(1)
-
0.0199
-
Tan Poh Ching(3)
500,000(2)
-
0.0199
-
Robert William Boyle
-
-
-
-
Dato’ Jamaludin Bin Ibrahim(5)
750,000(4)
-
0.0298
-
Tan Sri Dato’ Megat Zaharuddin Bin Megat
Mohd Nor
% of issued shares
Indirect
-
Notes:
(1)
Held through a nominee, namely, CIMSEC Nominees (Tempatan) Sdn. Bhd.
(2)
Held through a nominee, namely, RHB Capital Nominees (Tempatan) Sdn. Bhd.
(3)
Tan Poh Ching has resigned as Director of Maxis with effect from 1 January 2007.
(4)
100,000 ordinary shares of RM0.10 each are held through a nominee, namely, RHB Capital Nominees
(Tempatan) Sdn. Bhd., 500,000 ordinary shares of RM0.10 each are held through a nominee, namely,
Citigroup Nominees (Tempatan) Sdn. Bhd. (formerly known as Citicorp Nominees (Tempatan) Sdn.
Bhd.) and 150,000 ordinary shares of RM0.10 each are registered in his own name.
(5)
Dato’ Jamaludin Bin Ibrahim also holds 2,559,578 options over unissued ordinary shares in Maxis
pursuant to Maxis Employee Share Option Scheme. The number of option shares and the price per
option share held by Dato’ Jamaludin Bin Ibrahim is set out below:
Option over number of shares of RM0.10 each
No. of Option Shares
Price per Option Share
1,143,578
RM4.36
368,000
RM5.13
304,000
RM8.15
496,000
RM8.69
248,000
RM8.05
- 28 -
8.5
Key Management Team
The management team in charge of the Malaysian operations is headed by the CEO, Dato’
Jamaludin Bin Ibrahim(1) and a team of experienced management and professional personnel.
As at 30 November 2006, the key personnel in the management team of the Malaysian
operations are as follows:
Name
Designation
Dato’ Jamaludin Bin Ibrahim(1)
CEO/Executive Director
Edward Ying Siew Heng
Chief Operating Officer
Rossana Annizah Bt Mohd Rashidi
Chief Financial Officer and Head of Finance and
Administration Division
Rolf Marthinusen
Chief Technical Officer and Senior General Manager
and Head of Network Engineering and Operations
Division
Chua Seok Theng
Chief Information Officer and Senior General
Manager, Head of Information Services Division
Geoffrey Shelley
General Counsel and Head of Legal
Azmi Bin Hj Ujang
Senior General Manager, Head of Human Resources
Division
Chow Chee Yan
Senior General Manager, Head of Internal Audit
Division
Mohamed Fitri Abdullah
Senior General Manager, Head of Enterprise
Business Division
Thomas Schnitker
Senior General Manager,
Head of Consumer Business Division
Dr Nikolai Dobberstein
Senior General Manager, Head of Products & New
Businesses
Navin Sonthalia
Senior General Manager and Head of Corporate
Strategy & Business Support
Paul Salmon
General Manager, Acting Head of Technology
Development Division
Tan Lay Han
Senior General Manager, Head of Consumer
Marketing Department
Dipak Kaur
Company Secretary
- 29 -
Note:
(1)
Dato’ Jamaludin Bin Ibrahim was redesignated as "Group CEO" with effect from 5 December 2006. As
"Group CEO", Dato' Jamaludin Bin Ibrahim is responsible for enhancing the Group's performance in
Malaysia, Indonesia and India and will provide overall leadership to the Group. With effect from 15
January 2007, Sandip Das was appointed as "CEO", taking on the responsibility for the Malaysian
operations of Maxis.
The profiles of the management team for the Malaysian operations are as follows:
(a)
Dato’ Jamaludin Bin Ibrahim’s detailed profile is contained in the “Profile of
Directors” section as set out in Section 8.4.1 of this Information Memorandum.
(b)
Sandip Das was appointed CEO of Maxis with effect from 15 January 2007. Sandip
joins Maxis after 13 years with Hutchison Essar Telecom, where he held the role of
Deputy Managing Director and director on the board of Hutchison Essar Telecom
group of companies, heading the operations in India and Hutch brand. Sandip will be
responsible for the Malaysian operations. In addition, he will also play a key role in
developing strategies for Maxis’ operations in India. Sandip holds a Masters in
Business Administration from the Faculty of Management Studies, University of
Delhi, and a Bachelor in Mechanical Engineering Degree from the Regional
Engineering College, Rourkela in India.
(c)
Edward Ying Siew Heng was appointed Chief Operating Officer in May 2003. He is
responsible for managing all aspects of the day-to-day operations of the Malaysian
business including marketing, sales, customer service, product development and the
engineering and information technology functions within the Malaysian Group’s
overall business strategies.
Prior to joining Maxis, Edward was the Chief Operating Adviser of Globe Telecom, a
Singapore Telecom International (“STI”)’s investment. Initially overseeing fixed and
international operations, he later took on the role of managing Globe Telecom’s
mobile business operations. Before Globe Telecom, Edward was the Managing
Director of Cambridge Cable Group United Kingdom, STI’s United Kingdom joint
venture telephone and cable television services and the Managing Director of MTV
Channel Ltd/MBC Networks Ltd, STI’s joint venture in Sri Lanka that operates a
television and 2 commercial radio stations. Edward has over 24 years of management
experience in the telecommunications and media industry.
(d)
Rossana Annizah Bt Mohd Rashidi has been Chief Financial Officer since 1
January 2004. She joined Maxis in May 2003 as Deputy Chief Financial Officer,
bringing with her more than 15 years of working experience in the financial services
sector. Prior to this, she was with RHB Bank where her last held position was Head of
Enterprise Banking. In this capacity, she was responsible for managing the bank’s
corporate and commercial banking portfolios, debt capital market activities, trade
financing and Islamic banking products. Rossana was also a member of the bank's
management committee and the Information Technology steering committee. In
addition, she was a director of RHB (Labuan) and Chairperson for a number of
Corporate Debt Restructuring Committee for debt restructuring initiatives.
Rossana was previously with Citibank, Kuala Lumpur where she rose to the rank of
Assistant Vice President before she left to join RHB Bank in 1994.
Rossana holds a Bachelor of Arts degree in banking and finance from Canberra
University, Australia.
- 30 -
(e)
Geoffrey Shelley was appointed General Counsel on 1 January 2005, having joined
Maxis on 1 October 2004 as Senior General Manager and Deputy General Counsel.
Prior to joining Maxis, he was with Minter Ellison Lawyers, one of the largest legal
firms in Australia with offices throughout the Asia Pacific region, for over 8 years,
the last 3 as Partner. Before joining Minter Ellison, Geoff was a solicitor for the
Australian Government in Canberra and prior to that, a professional engineer for the
Shell Company of Australia for 3 years. Geoff holds a Bachelor of Laws from the
Australian National University, Canberra and a degree in Mechanical Engineering
from the University of New South Wales.
(f)
Rolf Marthinusen was appointed Head of Network Engineering and Operations on 2
August 2004. He is responsible for the operations of the Malaysian Group’s
telecommunications network. Prior to joining Maxis, Rolf was Deputy Chief
Technology Officer with DTAC in Thailand. Before that, Rolf was with Telenor
Mobile Communications, Norway as Senior Vice-President for Network and
Technology, and simultaneously Head of Telenor Mobile’s Global Procurement
Team. He was previously also a consultant with Norconsult Telematics in Saudi
Arabia, working as the GSM Project Manager for Saudi Telecom’s GSM build-up.
Prior to this, he was with Telenor Mobil AS and Norwegian Telecom, leading
network planning, project management and telecommunications engineering. Rolf
holds a Bachelor of Science degree in Electronics Engineering from Ostfold
Technical College, Norway and a Master of Science degree in Electronics and
Computer Engineering from the University of Trondheim, Norway.
(g)
Chua Seok Theng was appointed Chief Information Officer on 12 July 2004. She is
responsible for the overall management of the Information Services Division. Prior to
joining Maxis, Seok Theng was with DiGi Telecommunications Sdn Bhd for more
than 9 years as its Chief Information Officer. Seok Theng has 23 years of working
experience. She was a System Integration Manager with Bass Consulting Sdn Bhd,
Software Manager at Far East Computers Sdn Bhd and Systems Analyst with
Dataprep (M) Sdn Bhd. Seok Theng holds a Bachelor’s degree in Computer Science
from the National University of Taiwan and a Masters degree in Engineering from the
Asian Institute of Technology, Thailand.
(h)
Mohamed Fitri Abdullah was appointed Head of Enterprise Business on 3 January
2006 and he is responsible for the Corporate Business segments for Maxis. He is
responsible for providing leadership to the enterprise business segment for sales,
marketing, solutions creation, products, and support services. Fitri brings with him
over 17 years of working experience and joins Maxis from Hewlett-Packard (M) Sdn
Bhd (“HP”) where he held various roles and positions, both in the country and region,
in the Consulting and Systems Integration division while attached there for over 9
years. His last position at HP was as the Regional Director for the Systems
Integration business for the Communications industry in the Asia region. Prior to
joining HP, Fitri was a Consulting Manager with Ernst & Young, where he worked in
several IT consulting engagements with various clients in Malaysia. He started his
career with BULL Worldwide Information Systems, United States as a Principal
Software Engineer from 1989 to1993. Fitri holds a Master of Science Degree
(Computer Science) from Arizona State University and a Bachelor of Science
(Computer Science) from Indiana State University in the United States.
(i)
Chow Chee Yan was appointed Head of Internal Audit in June 2002. Prior to joining
Maxis, he was Director of Risk Management of MEASAT Broadcast Network
Systems Sdn. Bhd. and was responsible for internal audit and change management
activities. He has 13 years' experience with the Schlumberger Group as International
Financial Controller in Singapore, Indonesia and the United States. Prior to this, he
- 31 -
was with Ernst & Whinney, Singapore (from 1981 to 1982) and Turquands Barton
Mayhew, Manchester (from 1977 to 1981). He is a Chartered Accountant (England &
Wales) and holds a Master of Business Administration degree from Cranfield
Institute of Science and Technology in the United Kingdom.
(j)
Tan Lay Han was appointed Head of Consumer Marketing on 1 September 2006. He
is responsible for providing strategic marketing leadership to ensure the Malaysian
Group remains the No. 1 mobile brand in Malaysia, in terms of market share, brand
preference, brand awareness, customer satisfaction and ARPU. Lay Han joined Maxis
in October 1999 as Head of Sales and Distribution. Prior to joining Maxis, Lay Han
was General Manager at Tanjong Golden Village Sdn Bhd (now known as TGV
Cinemas Sdn Bhd). He was also involved in various business development projects
for Tanjong. Lay Han was previously with BP Malaysia Sdn Bhd where he held
various marketing and operations positions for 9 years. Lay Han holds a Bachelor of
Engineering degree from the Royal Melbourne Institute of Technology, Australia and
a Master of Business Administration degree from the Cranfield Institute of
Technology in the United Kingdom.
(k)
Azmi Bin Hj Ujang was appointed Head of Human Resources in October 1999 and
has been with Maxis for 14 years. Prior to joining Maxis, he was a Dealer
Representative at Seagrott & Campbell, a stock broking firm for a year and spent 7
years at Standard Chartered Bank Berhad as a Covenanted Officer/National Officer in
banking operations and human resources. He earned a Bachelor of Science (Finance)
and a Masters of Business Administration from Indiana State University in the United
States.
(l)
Thomas Schnitker was appointed Head of Consumer Business Division in January
2006. He is responsible for all sales, marketing and customer service functions for the
consumer market. His key priorities include shaping new short and long-term
strategies and directions for the consumer segment, given the changing industry and
technology landscapes. Tom joined Maxis from Telstra Mobiles in Australia, where
he commercially managed the mobile business, managed the launch of the WiFi
business, and transacted a number of large commercial deals over 3 years. He is
widely experienced in business development, commercial management, marketing,
financial restructuring and operations improvement, having had significant business
exposure to many international cultures. He joined Telstra Mobiles in 2002 as Head
of Business Development, launching Telstra’s WiFi business, developing its wireless
networks evolutionary roadmap, transacting a number of multi-million dollar
commercial deals and managing the Prepaid/Youth and Postpaid Consumer Mobile
businesses commercially. Prior to Telstra Mobiles, Tom was with McKinsey &
Company from 1994 to 2002, based in Australia and South Africa, for 8 years (the
last 3 as a Junior Partner). During this time, he led a number of engagements for
major clients in the telecoms, retail finance and manufacturing sectors and also
worked in Australia/New Zealand and South Africa. He also led and assisted in
engagements in Singapore, Austria, Nigeria, Korea, Malaysia and South America.
Tom holds a BA (Hons) Degree from Oxford University in the United Kingdom and a
Masters in Business Administration from Columbia Business School in the United
States.
(m)
Dr Nikolai Dobberstein is the Head of Products and New Businesses, responsible
for product development and marketing as well as building the Malaysian Group’s
new infotainment and broadband businesses. Nikolai joined Maxis in December 2004
to drive the development of Maxis 3G and broadband businesses. Before joining
Maxis, Nikolai was 12 years with McKinsey & Company, where he was the
Managing Partner of the Malaysian office since 2002. Nikolai came to Malaysia in
- 32 -
November 1996, after having worked in the German, Italian and Indian offices of
McKinsey. Nikolai has been involved extensively in telecommunications and hightech work in Asia, including issues of telecommunications transformation, national
technology strategy development and R&D commercialisation. Nikolai holds a Ph.D.
in Technology and Innovation Management from University of Kiel, Germany. He is
also a director of Scicom (MSC) Bhd, a Mesdaq-listed customer care operator.
(n)
Navin Sonthalia was appointed Head of Business Support Division in April 2005. In
January 2006, he was also made responsible for the Corporate Strategy unit. He is
currently responsible for corporate strategy and business planning and the Malaysian
Group’s overall change management initiatives. He also leads a team consisting of
members from diverse industry backgrounds and functional expertise, who undertake
various performance and process improvement measures, company-wide. With the
Maxis’ organic as well as inorganic growth, he also leads and coordinates several
associated business support initiatives. Navin was formerly with PT Excelcomindo
Pratama Tbk, the third largest cellular operator in Indonesia, as its Chief Financial
Officer. He spent 9 years with PT Excelcomindo Pratama Tbk. Prior to that, he held
the Corporate Planning & Accounting function with PT Bentoel – one of Indonesia’s
largest clove cigarette manufacturers, and also a licensee of Marlboro cigarettes from
Philip Morris United States. He holds multiple qualifications from India and the
United Kingdom, and is a qualified Chartered Management Accountant, Chartered
Certified Accountant, certified Corporate Treasurer, Costs & Works Accountant and
Company Secretary. He also holds an Honours Diploma in Systems Management.
(o)
Paul Salmon was appointed Acting Head of Technology Development in November
2006. Paul is responsible for leading the evaluation and introduction of new
technologies such 3G/HSDPA, WiMax and Mobile TV, and for developing Maxis’
Next Generation Network strategies.
Paul joined Maxis in July 2003, from the Kuwait GSM operator Wataniya Telecom,
where he was Network Planning and Engineering Manager. Prior to that, Paul had
spent 17 years in Telstra Australia in both fixed and mobile network planning and
design positions. Paul holds a Bachelor of Engineering Degree (Honours) in
Electronic Systems and Computing from Queensland University of Technology,
Australia.
(p)
Dipak Kaur was appointed Company Secretary in September 2001. Prior to joining
Maxis, she spent 6 years at DMIB Berhad as Company Secretary/Legal Advisor and 2
years at Arab Malaysian Corporation Berhad. She earned a Bachelor of Laws from
University of Leicester, United Kingdom and a Masters in Law from University of
Malaya. She also obtained a Certificate of Legal Practice from the Legal Profession
Qualifying Board, a Certified Diploma in Accounting and Finance from the
Association of Chartered Certified Accountants and is a Graduate ICSA from The
Malaysian Institute of Chartered Secretaries and Administrators. She was admitted to
the High Court of Malaya as an Advocate and Solicitor in 1993.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
- 33 -
9.
9.1
BUSINESS OVERVIEW
Overview
Maxis, through its Malaysian Subsidiaries, is the leading mobile and infotainment provider in
Malaysia and also has operations in India and Indonesia. As at 30 September 2006, Maxis
Group had approximately 12.7 million subscribers, with approximately 8.9 million and 3.8
million subscribers in Malaysia and India respectively, and in Malaysia, Maxis’ subscriber
base accounted for approximately 40.6% of the mobile market.
Maxis began commercial operations in Malaysia in 1995 and provides mobile, fixed and
international telecommunications services. It offers an exciting range of quality and
innovative services on its mobile and broadband infrastructure. Its leadership position is
founded on the bedrock of high quality network and customer services, extensive coverage,
superior distribution and innovative services/products.
Maxis was listed on Bursa Securities on 8 July 2002. Currently, Maxis ranks amongst the top
10 largest publicly listed companies in Malaysia by market capitalization, and has a market
capitalization of about RM28 billion.
On 7 May 2003, Maxis completed its acquisition of the entire equity interest in Malaysian
Mobile (Malaysian Mobile was formerly known as TimeCel Sdn Bhd) and it became a
wholly-owned subsidiary of Maxis.
Maxis continues to move beyond voice and basic data services to a leading advanced data and
infotainment service provider in Malaysia. In 2005, Malaysian Mobile launched its 3G
services with a new generation of mobile technology and became the first in the world to
launch HSDPA for residential broadband.
In October 2006, Maxis joined the Fixed Mobile Convergence Alliance, a leading non-profit
trade association focused on the rapid industry adoption of convergence technologies. This
reinforces Maxis’ commitment to the vision of convergence and seamless communications
services between fixed and mobile networks.
In April 2005, Maxis began its regional expansion with the completion of its acquisition of
51% of NTS, which holds a national licence for GSM1800 and 3G services in Indonesia. In
March 2006, Maxis completed its acquisition of 74% equity interest in Aircel, an Indian
mobile operator. These acquisitions provide Maxis a strong foothold in 2 of the most
attractive high growth, low penetration markets.
Aircel is principally engaged in the business of providing cellular services, and together with
its subsidiaries, ACL and DWL, has operations in 9 circles (Chennai, Tamil Nadu, Assam,
North East, Orissa, West Bengal, Jammu & Kashmir, Bihar and Himachal Pradesh). Aircel
Group has recently received and accepted Letters of Intent from DoT for the remaining 14
circles of India.
NTS is deploying its network in Jakarta and other key regions on the Jawa island, and expects
to commercially launch its mobile services soon.
- 34 -
9.2
Corporate Structure
The following chart illustrates the corporate structure of the active and semi active operations
in the Group as at 30 November 2006:
- 35 -
9.3
Malaysian Operations
9.3.1
Principal Products and Services
9.3.1.1 Mobile Services
Overview
Maxis operates a nationwide digital mobile network in Malaysia under licences held by
certain Malaysian Subsidiaries. These licences do not impose any rollout or minimum
geographic or population coverage obligations. However, the 3G Spectrum Assignment has
certain rollout obligations.
The spectrum under which the Malaysian Group operates its digital mobile network is further
set out in Section 9.3.3 of this Information Memorandum.
The Malaysian Group's mobile network is interconnected to all other fixed and mobile
operators in the country so as to allow calls to and from any fixed line or mobile telephone in
Malaysia, as well as making and receiving international calls.
Post-paid Mobile
The Malaysian Group’s post-paid service was launched in August 1995 and is sold under the
maxis brand. Post-paid revenues are dependent on the customer's particular rate plan and
usage. On subscription and depending on the rate plan chosen, customers are charged a
monthly access fee. Malaysian Mobile operates under calling party pays whereby customers
are only charged for calls made, except when roaming internationally when they are charged
for incoming calls. In addition, additional monthly fees are charged for certain value-added
services to which the customer may subscribe and for advanced data services such as music
downloads, games, sports, caller ring-tones, voice SMS, colour SMS and multimedia
messaging services. Subscribers are not bound to any minimum subscription period unless as
part of a promotional marketing programme which may include reduced usage or access fees
for an initial period to new subscribers. To cater to the needs of the subscribers, several
different rate plans are offered.
Malaysian Mobile also provides Blackberry Internet Solutions and data connection via Maxis
Data Card on 3G and HSDPA technology. The BlackBerry service is a single, integrated
handheld solution that provides the subscriber access to a broad range of applications which
include e-mail, phone, intranet, Internet, SMS and personal information management
applications operating over GSM and GPRS networks. It uses the ‘push’ technology which
automatically routes all e-mail straight to the subscriber’s handheld.
Pre-Paid Mobile
The Malaysian Group’s pre-paid service was launched in October 1999 in Peninsular
Malaysia and in November 2001 in East Malaysia. The service is sold under the Hotlink brand
and is a ready-to-go service with no monthly charges payable. Hotlink offers a suite of valueadded services and advanced data services currently also available to post-paid mobile
customers.
- 36 -
International Roaming
Malaysian Mobile has international roaming with operators in other countries under which the
other operators allow both post-paid and prepaid mobile customers to use their respective
foreign networks while in the relevant country in return for reciprocal use of the Malaysian
Group’s network in Malaysia.
Malaysian Mobile has the largest international roaming in Malaysia for voice and data
services with over 300 mobile operators in more than 150 countries and 3G coverage in more
than 25 countries.
9.3.1.2 Fixed Line Services
Maxis Broadband operates a fixed telecommunications network in Malaysia under licences
which will expire in February 2013. Maxis Broadband’s fixed line local and national long
distance services were launched in January 1996.
Malaysian Mobile is the first in the world to launch HSDPA or 3.5G services for large scale
wireless residential broadband services. In addition, Maxis has rolled out ADSL in its 50,000
fixed line homes. Heeding the Government’s call for an increase in broadband penetration,
this service would give consumers an alternative to the current Telekom Malaysia’s Streamyx
monopoly of broadband service.
In conjunction with the Malaysian Group’s increased focus on mobile services, fixed line
operations have evolved from providing a full suite of voice, data and CATV services targeted
at the consumer and business markets to the provision of business services targeted at selected
Klang Valley business areas and of long distance and access infrastructure for the mobile
business.
Fixed line services offered include:
•
Voice Services
Single/multi-line business telephone, voice trunk services - premium and valuecall
plans, and Hosted Voice Over Internet Protocol for local domestic long distance and
international calls and other value added services.
•
Data Services
Basic data services such as Domestic Private Leased Circuit and IPLC are offered to
corporate customers for their point-to-point connectivity needs, complemented by
advance managed data services such as Multi Protocol Layer Switching solutions.
•
Broadband Services
Selected broadband services, including WLAN, dedicated internet leased line and
high speed internet access (using ADSL technology) services are offered to large
corporate and multinational customers. These services are offered together with
mobile and internet services to provide customers with a broad range of
communications solutions.
•
VSAT Services
Satellite-based multimedia voice and data transmission services.
- 37 -
9.3.1.3 International Gateway Services
Maxis International offers international communications services under licences which will
expire in February 2013. It offers these services mainly to international telecommunications
carriers and domestic wholesale companies for termination of traffic into and out of Malaysia,
and for sending the Malaysian Group's own outbound international traffic. All IDD traffic
from the Malaysian Group's mobile and fixed line operations passes through Maxis
International’s international gateway. As at 30 November 2006, Maxis International has
bilateral connections with 55 carriers in 24 countries. It has invested in a number of
submarine cable systems to carry its international voice and data traffic.
International Tariffs
Maxis International derives revenues from outgoing international calls made by the Malaysian
Group’s customers in Malaysia and from settlements from overseas telecommunications
operators for incoming calls which use the Malaysian Group’s facilities. Maxis International
in turn, incurs costs to overseas telecommunications operators for the use of its facilities when
outgoing calls are made from Malaysia.
9.3.2
Network Infrastructure
The Malaysian Group’s network infrastructure comprises the mobile network, the fixed
network and the international network. The network infrastructure is geared primarily to
support the mobile business.
Mobile Network
The Malaysian Group’s initial network rollout commenced in August 1995 covering the
densely populated Klang Valley, Penang, Ipoh and Johor Bahru regions. Coverage of certain
key areas of Sabah and Sarawak in East Malaysia was achieved in 2001.
As at 30 September 2006, the mobile network comprised over 4,600 2G base stations
covering approximately 87% of the Malaysian population in both Peninsular Malaysia and
East Malaysia. The core of the mobile network is supported by NSS elements which comprise
a total of 26 MSC which include gateway mobile switching centres and a total of 8 HLR.
The base stations are interconnected to respective regional NSS elements via microwave,
fibre optic and VSAT links. The NSS elements in Peninsular Malaysia are distributed among
TOCs which are in turn interconnected via its NOFN.
In addition to providing voice service and related value added services such as voicemail and
short messaging service to its customer, the entire mobile network is also fully configured to
deploy GPRS services which enable the facilitation of other value added services such as
Multimedia Message Service and mobile data service enablers including data/content and
transaction servers.
The majority of the base stations are located on buildings or vacant lots for which tenancies
have been individually negotiated for terms from 1 year to 3 years. The majority of MSC are
located on properties owned by a Malaysian Group company.
UMTS, a subsidiary which acquired 3G spectrum in April 2003 has successfully rolled out
the 3G network using Ericsson infrastructure in selected areas in late 2004/early 2005. As at
30 September 2006, the 3G network has over 1,100 sites in service covering Penang, Klang
Valley, Johor Bahru and Kuantan.
- 38 -
The Malaysian Group has also launched a wireless broadband service in October 2006 using
the HSDPA technology on top of the 3G network.
In addition to the above, Maxis has also placed a bid for WiMAX spectrum and the Malaysian
Ministry of Energy, Water and Communications is expected to announce the results in early
2007. With this technology, one is able to access broadband in a wide area even while on the
move. As Aircel was the first in India and among the first 5 in the world to launch WiMAX
services, early experience gained in this field will place Maxis in a great position to bring a
whole new broadband experience to the masses.
Fixed Line Network
The Malaysian Group’s fixed line network supports the provision of integrated broadband
services including the transmission of voice, data and video. The fixed line network
comprises both the transmission network (including its long distance NOFN) and a local
access and metropolitan area network (concentrated in the Klang Valley) to support the
mobile, fixed and international operations. The fixed line network also serves to interconnect
all TOCs in Peninsular Malaysia.
The local access network in the Klang Valley uses a combination of fibre optic and copper
networks to provide voice and broadband services (such as ADSL, etc).
The transmission network is the backbone of the network and comprises a combination of
fibre, satellite and microwave infrastructure, connecting the mobile, local access, international
and IP networks. The transmission network is configured as a fully redundant local loop at
speeds of up to 2.4 Gbps. The fibre component of the transmission network is predominantly
owned, with some leased capacity. In more remote areas within Peninsular Malaysia and East
Malaysia, VSAT infrastructure is used, which utilises the MEASAT 1 and 2 satellites and 4
earth stations as part of the transmission network.
Digital microwave transmission is used to link the various geographically separated
components of the system. As capacity requirements increased, microwave links have been
supplemented and/or replaced by local access and fibre optics and the Malaysian Group’s
NOFN.
The NOFN was constructed in 2000 and 2001 to further complement the existing
transmission network and to provide increased resiliency, reliability and transmission quality
to the network, in particular for the inter-office connections. The NOFN is fully redundant
and spans along the west coast of Peninsular Malaysia from the north in Arau, Perlis to Johor
Bahru in the south (connecting to Singapore) and back north to Kuantan along the east coast
before cutting across from Kuantan to Kuala Lumpur. All primary routes for the NOFN are
owned and operated by the Malaysian Group except for the diverse routes from Kuala
Lumpur to Penang (running along a separate route along the west coast), the "return" section
from Kuantan to Kuala Lumpur and the Kuantan to Cherating section of the network, which
are leased.
The mobile and fixed line businesses operate on the basis of integrated infrastructure,
including microwave and fibre links. This approach has reduced deployment costs through
integration of its businesses.
- 39 -
International Gateway Network
The international gateway network comprises 2 international gateway switches and the
submarine cable infrastructure and is connected to the rest of the Malaysian Group’s network
and other local and international operators.
The international gateway network is connected to 3 submarine cable landing stations owned
and managed by Telekom Malaysia. Submarine cable circuits are matched with foreign
operators to send and receive voice and data traffic. The Malaysian Group's submarine cable
infrastructure comprises investment in the APCN-2 (Asia Pacific Cable Network 2), SEAME-WE-3 (Southeast Asia, Middle East and Western Europe Cable 3), APCN (Asia Pacific
Cable Network), Japan-U.S. (Japan-United States), TPC-5 (Trans Pacific Cable 5) and FLAG
(Fibre Optic Link Around The Globe) submarine cable system.
IP Network
The IP network primarily comprises points-of-presence, the core backbone network and the
border gateway network for international peering. The IP network is to support broadband and
internet leased lines and services in addition to GPRS and 3G services currently on trial.
Currently the Malaysian Group has local and international internet peering services with other
service providers. Internet transit services are via NTT MSC Sdn. Bhd., Singapore
Telecommunications Limited and Teleglobe International Corporation.
Interconnection
To enable users to call and receive calls from outside the Malaysian Group’s network, the
Malaysian Group interconnects with all other operators in Malaysia through its local tandem
switches and with international operators through its international gateway switches.
9.3.3
Licences, Spectrum and Intellectual Property
Licences
Under the CMA, the ownership or provision of any network facilities, the provision of any
network services, the provision of any application services, or the provision of any content
applications services requires a licence.
Certain companies in the Malaysian Group hold individual licences (network facilities
provider and network services provider) which will expire between 2012 to 2014. A licensee,
under the CMA, may apply for the renewal of its individual licence prior to expiry. The
Minister, on recommendation of the Commission, can grant the renewal. The Malaysian
Group also has class licences which are subject to renewal annually.
Spectrum
Maxis Mobile has been allocated a total of 2x10 MHz of spectrum in the 900 MHz frequency
band and 2x6 MHz in the extended 900 MHz frequency band. Malaysian Mobile has been
allocated 2x25 MHz of spectrum in the 1800 MHz frequency band.
On 2 April 2003, the Commission awarded the 3G Spectrum Assignment to UMTS. UMTS is
held by AWT (75%) and MMT (25%). The duration of the 3G Spectrum Assignment is for 15
years commencing from 2 April 2003.
- 40 -
The 3G Spectrum Assignment assigned to UMTS consists of 2x15 MHz FDD and 1x5 MHz
TDD frequencies.
Intellectual Property
The Malaysian Group relies on a combination of trademark, servicemark and domain name
registrations, copyright protection and contractual restrictions to establish and protect its
brand names and logos, marketing designs and internet domain names.
9.3.4
•
Trademarks and Servicemarks. The Malaysian Group’s core registered trademarks are
“maxis” and “Hotlink”.
•
Domain Names. The Malaysian Group owns a number of internet domain names, the
most significant of which are “maxis.com.my”, “maxis.net.my” and “hotlink.com.my”.
Suppliers
Generally, the telecommunications industry in Malaysia is dependent on imports for the
majority of its infrastructure network equipment and new technologies as most of them cannot
be sourced locally. The Malaysian Group's networks utilise standard equipment which is
available from a limited number of suppliers. Most of the GSM equipment for the Malaysian
Group's mobile network operations are purchased from Ericsson, Siemens, and Motorola.
Maxis maintains close working relationships with its key network equipment suppliers. The
Malaysian Group also purchases certain systems from various other key suppliers such as,
LogicaCMG and Comverse Kenan.
9.4
Overview of Maxis’ International Ventures
The acquisition of 2 significant foreign subsidiaries, namely, NTS and Aircel, allowed Maxis
to have a foothold in 2 of the world’s most attractive high-growth, low penetration markets,
namely, Indonesia and India.
9.4.1
Aircel
Aircel was incorporated in Tamil Nadu, India on 20 December 1994 as Srinivas Cellcom
Limited under the Companies Act, India, prior to assuming its present name on 28 October
1999. Aircel became a wholly owned subsidiary of Aircel Televentures Limited on 28 April
2003 before becoming a subsidiary of Maxis, through GCSHL on 21 March 2006. With an
authorized share capital of 250 million equity shares of INR10 each and issued and paid up
share capital of 243,243,243 equity shares of INR10 each, GCSHL holds a combined equity
interest, both directly and indirectly (through Deccan), of 74% in Aircel.
Aircel is principally engaged in the business of providing cellular services and is the market
leader in the Tamil Nadu circle. Aircel together with its subsidiaries, ACL and DWL, has
operations in 9 of the 23 circles in India, namely, Chennai, Tamil Nadu, Assam, North East,
Orissa, West Bengal, Jammu & Kashmir, Bihar and Himachal Pradesh. Aircel Group has
recently received and accepted the Letters of Intent for award of licences from the DoT for the
remaining 14 circles.
- 41 -
9.4.2
NTS
NTS was incorporated on 2 October 2000 in Indonesia. On 29 April 2005, NTS became 51%subsidiary of Maxis, through TG, a wholly-owned subsidiary of Maxis. PT Aneka Tirta Nusa,
an Indonesian company, holds the remaining 49% stake. As at 30 November 2006, the
authorised share capital of NTS comprises of 11,468,852,908 shares of nominal par value of
IDR500 each and the issued and paid-up share capital is IDR1,433,606,613,500 comprising
2,867,213,227 shares of nominal par value of IDR500 each.
NTS is principally engaged in the business of providing mobile telecommunications services
and is currently in the process preparing for a commercial launch. It holds a national licence
for 2G and 3G services in Indonesia.
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10.
10.1
THE REGULATION OF TELECOMMUNICATIONS IN MALAYSIA
The Regulatory Environment
In November 1998, the Government introduced a new regulatory regime for the
communications and multimedia industry, in recognition of the need to create a robust and
vibrant communications and multimedia industry as the primary platform for developing a
knowledge-based economy.
The MCMCA came into force on 1 November 1998. The CMA came into force on 1 April
1999 (except for certain sections which came into force at later stages), replacing the
Telecommunications Act 1950 and the Broadcasting Act 1988 (collectively, the “Repealed
Acts”). These legislations are intended to address the convergence of the communications and
multimedia industries.
10.2
Regulator
The Commission, established under the MCMCA, is responsible for the regulation of the
communications and multimedia industry.
10.3
Legislation
The CMA and its subsidiary legislations are the primary legislation regulating the converging
communications and multimedia industry. The CMA applies to communications over the
electronic media but not print media. It also sets out the licensing and regulatory framework
in relation to the communications and multimedia industry, establishes the powers and
functions for the Minister and the Commission and the powers and procedures for the
administration of the CMA.
10.4
Licensing Regime
Under the CMA, the ownership or provision of any network facilities, the provision of any
network services, the provision of any application services, or the provision of any content
applications services requires a licence, unless exempted by the Minister.
The regulatory framework established by the CMA and the Licensing Regulations provide for
4 main categories of licences as follows:
•
Network Facilities Provider: network facilities provider licences are for owners or
providers of physical infrastructure on which network services, applications services
and content application services are provided;
•
Network Services Provider: network services provider licences are for providers of
basic connectivity and bandwidth which support a variety of applications. Network
services enable connectivity or transport between different networks;
•
Applications Service Provider: applications service provider licences are for
providers of particular services, such as PSTN telephony and public cellular
telephony. Applications services are essentially the functions or capabilities, which
are delivered to end-users;
- 43 -
•
Content Applications Service Provider: content applications service provider licences
are for providers of certain content-based applications services, including traditional
radio and TV free-to-air broadcasting.
Within the above 4 categories, the CMA provides for the issuance of individual licences and
class licences.
10.5
Industry Self-Regulation
As part of the Government’s objective to promote greater industry self-regulation, the CMA
has established a regime of self-regulation by providing for the creation of industry forums.
The CMA provides for the designation of 4 different industry forums: the Access Forum, the
Technical Standards Forum, the Consumer Forum and the Content Forum. The primary
function of a designated industry forum is to formulate and recommend voluntary industry
codes, which would serve as a guide for the industry to operate, for registration with the
Commission.
10.6
Access Regime
The access regime is a regime established under the CMA to ensure that all network facilities
providers, network service providers, applications service providers and content applications
service providers can gain access to the necessary facilities on reasonable terms and
conditions in order to prevent the inhibition of downstream services.
The regime, which is overseen by the Commission, consists of rules and/or procedures for the
establishment of the access list and for the development of voluntary codes, mandatory
standards and undertakings which regulates the provision of access by an access provider to
an access seeker.
The access list is a list of facilities and services determined by the Commission to be essential
to the provision of network services and application services. Access providers shall, upon the
request of an access seeker, provider an access seeker access to its facilities and services listed
in the access list on reasonable conditions and in accordance with the standard access
obligation. The standard access obligation is an obligation on an access provider to provide
access to an access seeker on at least the same or more favourable technical standards and
quality as the access provider provides itself; and on an equitable and non-discriminatory
basis.
There is also a dispute resolution process under the regime whereby dispute may be referred
to the Commission for resolution.
The access list, voluntary industry codes on access, mandatory standard of access and access
pricing and Access Forum all fall within this access regime.
10.7
Interconnection Arrangement and Access Pricing
Interconnection Arrangement
The interconnection arrangements between companies in the Malaysian Group and other
licenced operators are governed by the access regime and interconnection agreements signed
between the respective parties. The existing interconnection arrangements with other licenced
- 44 -
operators have been replaced with new access agreements to be consistent with the
Commission’s Mandatory Standard on Access, Determination No. 2 of 2005 (“Mandatory
Standard on Access”). The new access agreements have been lodged and are pending
registration with the Commission.
Access Pricing
The Commission issued a determination on mandatory standard on Access Pricing, which is
cited as “the Commission’s Mandatory Standard on Access Pricing, Determination No. 1 of
2006” which came into operation on 15 February 2006 (the “Access Pricing
Determination”). The Access Pricing Determination amongst other rates, sets out the
maximum standard prices for fixed network origination/termination services and mobile
network origination/termination services in the form of 24-hour weighted average price,
effective from 15 February 2006 until 31 December 2008.
Therefore, with the issuance of the Access Pricing Determination, the access agreements
entered into by the Malaysian Group pursuant to the Mandatory Standard on Access has
incorporated the revised access charges to be consistent with the Access Pricing
Determination which applies retrospectively from 15 February 2006 for the services detailed
above.
10.8
Spectrum Regulations
The Spectrum Regulations regulates, amongst other things, the establishment of a spectrum
plan, the issuance of spectrum assignment, apparatus assignment, class assignment and the
compulsory acquisition of a spectrum assignment.
10.9
Rate Setting
The Communications and Multimedia (Rates) Rules 2002 regulates the tariffs for local calls,
national calls, payphone, operator assistance, internet access service, audiotext hosting
service, rental, connection fee and reconnection fees for the fixed telephony services. The
rates for cellular services are not regulated and may be set according to market forces.
10.10
Universal Service Provision
Under the universal service system which came into operation on 1 January 2002, the
Commission will, subsequent to a bidding process, designate a licensee as service provider in
underserved areas targeted by the Commission. The designated universal service provider will
receive payment from the universal payment fund operated by the Commission. The
Commission may, in certain circumstances, designate an operator as an universal service
provider in a particular area if no bids were received for that area.
The Universal Service Provision Determination No. 6 of 2002 made by the Commission on
13 December 2002 was subsequently varied by the Commission on 30 October 2003 via the
Variation to Commission’s Determination on Universal Service Provision (Determination No.
6 of 2002, Variation No. 1 of 2003 (collectively referred to as “Amended 2002 USP
Determination”). The Amended 2002 USP Determination came into operation on 1
November 2003. The Amended 2002 USP Determination, among other things, introduced
certain changes in connection with the calculation of contributions to the Universal Service
Fund including:
- 45 -
•
For services regulated under the Communications and Multimedia (Rates) Rules
2002:
•
•
From 1 January 2004, national calls, operator assisted calls and audio text
hosting have had a weightage factor of zero, a decrease from the previous
weightage factor of one;
For services not regulated by the Communications and Multimedia (Rates) Rules
2002:
•
From 1 January 2004, cellular mobile services and international roaming
services have had a weightage factor of one, an increase from the previous
weightage factor of 0.5;
•
From 1 January 2004, other activities subject to individual or class licence
(which are not specifically listed in the Amended 2002 USP Determination)
have had a weightage factor of one, an increase from the previous weightage
factor of zero.
On the same note, the Communications and Multimedia (Universal Service Provision)
(Amendment) Regulations 2003 was also gazetted on 30 October 2003, to improve the rate of
rollout out the installation of network facilities, network services and applications services to
all universal service targets.
10.11
Restrictions on Anti-Competitive Behaviour
General competition practices are also addressed in the CMA. In particular, a licensee may
not engage in conduct which has the purpose of substantially lessening competition in the
Malaysian communications market. Furthermore, if the Commission determines that a
licensee is in a dominant position, it may direct that licensee to cease conduct in that
Malaysian communications market which has or may have the effect of substantially
lessening competition in any Malaysian communications market and to implement
appropriate remedies.
The Commission has issued guidelines on “Substantial Lessening of Competition” and
“Dominant Position in a Communications Market”. However, The Commission had in August
2004, issued a public inquiry into the “Assessment of Dominance in Communication
Markets”. The Commission’s objective of the public inquiry is to obtain the public’s and
licensee’s views on the Commission’s recent study on the assessment of dominance in
selected communication market in Malaysia. The study findings, released on 8 December
2004, do not conclude any of the Malaysian Group’s licensees as dominant at present, with
the exception that all licensees are dominant for interconnection to their respective networks,
in line with established practice elsewhere.
The CMA also prohibits a licensee from entering into any understanding, agreement or
arrangement which provides for rate fixing, market sharing, boycott of a supplier of apparatus
or boycott of a competitor. In addition, the CMA prohibits mandatory tying or linking
arrangements regarding the provision or supply of products and services in a Malaysian
communications market.
- 46 -
11.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be made available for inspection at the office of the Trustee at
17th Floor, Menara Public Bank, 146, Jalan Ampang, 50450 Kuala Lumpur during normal working
hours throughout the tenor of the Programmes:
(a)
Memorandum and Articles of Association of Maxis as at 30 November 2006;
(b)
Annual Report for the financial year ended 31 December 2005 of Maxis;
(c)
CP/MTN Trust Deed;
(d)
MTN Trust Deed;
(e)
Agency Agreement for the CP/MTN Programme;
(f)
Agency Agreement for the MTN Programme;
(g)
Depository and Paying Agency Agreement for the CP/MTN Programme;
(h)
Depository and Paying Agency Agreement for the MTN Programme.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
- 47 -
APPENDIX I
TERMS AND CONDITIONS OF THE PROGRAMMES
Issuer
:
Maxis (“the Issuer”)
Trustee
:
PB Trustee Services Berhad (“the Trustee”)
Principal Adviser(s)/Lead
Arranger(s)
:
HSBC
Paying Agent
:
a.
CP/MTN Programme
BNM
b.
MTN Programme
BNM
Issue Agent
:
HSBC
Central Depositary
:
a.
CP/MTN Programme
BNM
b.
MTN Programme
BNM
Programme Description
:
Commercial Papers and/or Medium Term Note Programme
of up to RM500.0 million in nominal value (“CP/MTN
Programme”) and the Medium Term Note Programme of up
to RM 500.0 million in nominal value (“MTN Programme”)
(collectively “the Programmes”).
The Commercial Papers and/or the Medium Term Notes
shall be referred to as the “Notes” and the holders of the
Commercial Papers and/or the Medium Term Notes shall be
referred to as the “Noteholders”.
Programme Limit
:
CP/MTN Programme
The aggregate nominal value of the CP/MTN under the
CP/MTN Programme shall not exceed RM500.0 million.
MTN Programme
The aggregate nominal value of the MTN under the MTN
Programme shall not exceed RM500.0 million.
The issue size of each series of the CP/MTN or MTN will
be determined at the point of issuance.
- 48 -
Tenor of the Facility/Issue
:
a.
CP/MTN Programme
Tenor of the Facility
The CP/MTN Programme will have a tenor of 7 years
from the date of the first issue of the CP or MTN,
which shall be made within 2 years from the date of
the SC’s approval or such other extended period as
may be approved by SC.
Tenor of the Issue
The CPs may be issued for a tenor of 1, 2, 3, 4, 5, 6, 7,
8, 9, 10, 11 or up to 12 months from the date of issue
provided that no CPs shall mature after the expiry of
the tenor of the CP/MTN Programme.
The MTNs may be issued for a tenor of above 1 year
and up to 7 years as the Issuer may select, provided
that no MTNs shall mature after the expiry of the
tenor of the CP/MTN Programme.
b.
MTN Programme
Tenor of the Facility
The MTN Programme will have a tenor of 30 years
from the date of the first issue of the MTN, which
shall be made within 2 years from the date of the SC’s
approval or such other extended period as may be
approved by SC.
Tenor of the Issue
The MTNs may be issued for a tenor of above 1 year
and up to 30 years as the Issuer may select, provided
that no MTNs shall mature after the expiry of the
tenor of the MTN Programme.
The Tenor of each CP or MTN issued under the
Programmes will be determined at the point of
issuance.
Security/Collateral
:
None
Status
:
The Notes to be issued under the Programmes shall
constitute
direct,
unconditional,
unsecured
and
unsubordinated obligations of the Issuer ranking at all times
at least pari passu without any preference amongst
themselves and with all other direct, unconditional,
unsecured and unsubordinated liabilities of the Issuer,
present or future, other than liabilities preferred by law and
liabilities which benefit from liens or are subject to rights of
set-off arising in the normal course of trading.
- 49 -
Utilisation of Proceeds
Rating
:
:
a.
To refinance existing debt of the Issuer and its
Malaysian subsidiaries;
b.
To finance capital expenditure of the Issuer and
Malaysian subsidiaries which include purchase
equipments,
software
and
financing
construction/installation cost for the network
Malaysia; and
c.
For other general funding requirements and general
corporate purposes of the Issuer and its Malaysian
subsidiaries.
its
of
of
in
The CP/MTN Programme has been assigned the following
ratings:
Short Term Rating: P1
Long Term Rating: AAA
The MTN Programme has been assigned a Long Term
Rating of AAA.
Name of Rating Agency
Rating Agency Malaysia Berhad
Form and Denomination
:
a.
CP/MTN Programme
The CPs/MTNs will be in bearer form in the
denomination and multiples of RM1.0 million each.
Each issuance will be represented by a global
certificate (which is exchangeable for definitive
certificates on the occurrence of certain events). The
global certificate for the CPs/MTNs will be deposited
with BNM, as the Central Depository and will be
traded under the Scripless Securities Trading System
(“SSTS”) maintained by BNM.
b.
MTN Programme
The MTNs will be in bearer form in the denomination
and multiples of RM1.0 million each. Each issuance
will be represented by a global certificate (which is
exchangeable for definitive certificates on the
occurrence of certain events). The global certificate
for the MTNs will be deposited with BNM as Central
Depository and will be traded under the SSTS
maintained by BNM.
- 50 -
Issue Price
:
a.
CP/MTN Programme
CPs
CP shall be issued at a discount to face value and the
price payable for each CP shall be calculated in
accordance with the formula as set out in the FAST
Rules.
MTNs
MTN may be issued at par, a discount or a premium to
the face value and the price payable for each MTN
shall be calculated in accordance with the formula as
set out in the FAST Rules.
b.
MTN Programme
MTN may be issued at par, a discount or a premium to
the face value and the price payable for each MTN
shall be calculated in accordance with the formula as
set out in the FAST Rules.
Mode of Issue
:
a.
CP/MTN Programme
The CPs and MTNs will be issued without a
prospectus and in accordance with the FAST Rules.
CPs
The Facility Agent will, subject to the Selling
Restriction and agreement by the Issuer, invite a
selection of banks and other financial institutions to
participate as tender panel members to bid
competitively for the CPs to be issued under the
CP/MTN Programme and which shall be reported via
FAST and issued under RENTAS. The composition of
the tender panel may be varied from time to time by
the Issuer or, as the case may be, the Facility Agent as
directed by the Issuer. Allocation of the CPs to
bidders shall be in order of descending price bids. The
Issuer shall have the right, without assigning any
reasons therefore, to either reject or accept any or all
bids received from tender panel members, including
any oversubscription provided that it is within the
programme limit.
MTNs
MTNs may be issued by private placement, subject to
the Selling Restriction, without prospectus, and shall
be reported via FAST and issued under RENTAS.
- 51 -
b.
MTN Programme
MTNs may be issued by private placement subject to
the Selling Restriction, without prospectus and shall
be reported via FAST and issued under RENTAS.
Selling Restrictions
:
Selling Restriction At Issuance
The CPs and/or MTNs may not be offered or sold directly
or indirectly, nor may any document or other material in
connection therewith be distributed in Malaysia, other than
to persons falling within any one of the categories of
persons specified under:
a.
Schedule 2 or Section 38(1)(b);
b.
Schedule 3 or Section 39(1)(b); and
c.
Schedule 5 or Section 66(3)
of the Securities Commission Act 1993 (as amended from
time to time).
Selling Restriction Thereafter
The CPs and/or MTNs may not be offered or sold directly
or indirectly, nor may any document or other material in
connection therewith be distributed in Malaysia, other than
to persons falling within any one of the categories of
persons specified under:
a.
Schedule 2 or Section 38(1)(b); and
b.
Schedule 5 or Section 66(3)
of the Securities Commission Act 1993 (as amended from
time to time).
Listing Status
:
The CPs and MTNs will not be listed on any stock
exchange.
Redemption/Repurchase and
cancellation
:
Unless previously purchased and cancelled, the Issuer shall
redeem the Notes at their principal amount on the relevant
maturity date. The Issuer or its related corporations may, at
any time, purchase the Notes on the open market or by
private treaty at any price. Such Notes will not entitle the
Issuer or its related corporations to vote at any meetings of
the Noteholders and will not be deemed to be outstanding
for the purpose of determining the total votes exercisable by
the Noteholders whenever such determination is required
under the Trust Deed.
- 52 -
Interest/Coupon (%)
:
a.
CP/MTN Programme
CPs
The CPs will bear no coupons.
MTNs
The interest rates for the MTNs will depend on the
mode of issue selected by the Issuer at the point of
issuance, subject to agreement between the Issuer and
the placee(s).
b.
MTN Programme
The interest rates for the MTNs will depend on the
mode of issue selected by the Issuer at the point of
issuance subject to agreement between the Issuer and
the placee(s).
Interest/Coupon Payment
frequency
a.
CP/MTN Programme
CPs
Not applicable as the CPs will bear no coupon and
will be issued at a discount to its face value.
MTNs
Where interest rates are payable, it will be a fixed rate
payable semi-annually in arrears.
b.
MTN Programme
Where interest rates are payable, it will be a fixed rate
payable semi-annually in arrears.
Interest on late payment
:
In the event of overdue payments of any amounts under the
Programmes, the Issuer shall pay additional interest on such
overdue amounts at the rate of interest of 1.0% per annum
above the prevailing rate on the amounts outstanding and
unpaid calculated from the relevant due date up to the date
of full payment and such default interest shall accrue for the
number of days such payment is overdue on the basis of a
year of 365 days.
Minimum Level of Subscription
:
a.
CP/MTN Programme
5% of each issuance.
b.
MTN Programme
5% of each issuance.
- 53 -
Transaction Documents
:
(a)
Programme Agreement;
(b)
Tender Panel Agreement;
(c)
Agency Agreement;
(d)
Depository and Paying Agency Agreement; and
(e)
Trust Deed.
(collectively, the “Transaction Documents”)
Representations and Warranties
:
The Programmes will have the benefit of certain
representations and warranties to be given by the Issuer
which include the following:
(a)
Status: the Issuer is a company duly incorporated and
validly existing under the laws of Malaysia and each
of its Material Subsidiaries (as defined below) are
companies duly incorporated and validly existing
under the laws of Malaysia;
(b)
Powers and authorisations: (i) the memorandum and
articles of association of the Issuer include provisions
which give power, and all governmental or official
authority or consent has been obtained and action
taken, for the Issuer to execute and deliver, and
perform the transactions contemplated in the
Transaction Documents, and the Transaction
Documents constitute legal, valid, binding and
enforceable obligations of the Issuer, enforceable in
accordance with their respective terms; and (ii) the
memorandum and articles of association of the Issuer
and each of its subsidiaries (other than subsidiaries
incorporated outside Malaysia) include provisions
which give power, and all necessary governmental or
official authority have been obtained and action taken,
for the Issuer and the subsidiaries (other than
subsidiaries incorporated outside Malaysia) to own their
respective assets, carry on their business and
operations as they are now being conducted except
where the failure to do so, individually or in the
aggregate, could not result in a Material Adverse
Effect (as defined below);
(c)
Non-violation: neither the execution and delivery of
the Transaction Documents nor the performance of
any of the transactions contemplated therein does or
will contravene or constitute a default under, or cause
to be exceeded any limitation on it or the powers of its
directors imposed by or contained in, (i) any law,
regulations or bye-laws by which it, or any of its
assets are bound or affected, (ii) the memorandum and
articles of association of the Issuer or (iii) any
agreement to which the Issuer is a party or by which
- 54 -
any of its assets are bound;
(d)
Consents: all authorisations, approvals, consents,
licences, exemptions, registrations, recordings, filings
and notarisations and all payments of any duty or tax
and all other actions whatsoever have been duly
obtained, made or taken as necessary or desirable to
ensure the validity, enforceability or priority of the
liabilities and obligations of the Issuer and the rights
of the Noteholders under the Programme and the
Notes and remain in full force and effect;
(e)
No default: no event has occurred which constitutes or
which with the giving of notice and/or the lapse of
time and/or a determination by the relevant third party
would constitute, a contravention or default under,
any agreement or instrument by which the Issuer
and/or its Material Subsidiaries or any of their
respective assets are bound or affected being a
contravention or default which might have a Material
Adverse Effect on the Issuer or any of its Material
Subsidiaries;
(f)
Litigation: to the best of its knowledge upon
reasonable enquiry being made, no litigation,
arbitration or administrative proceeding or claim
which might by itself or together with any other such
proceedings or claims have a Material Adverse Effect,
is presently in progress or pending or, threatened
against the Issuer or any of its assets and no litigation,
arbitration or administrative proceeding or claim
which might by itself or together with any other such
proceedings or claims have a Material Adverse Effect
on the business, assets or condition of any of its
Material Subsidiaries is presently in progress or
pending or, threatened against any of its Material
Subsidiaries or their respective assets;
(g)
Tax Liabilities: to the best of the Issuer’s knowledge
upon reasonable enquiry being made, all necessary
returns have been delivered by or on behalf of the
Issuer and its Material Subsidiaries to the relevant
taxation authorities and neither the Issuer nor any of
its Material Subsidiaries is in default in the payment
of any taxes, and no claim is being asserted with
respect to any taxes which is not disclosed in the
financial statements;
(h)
Accounts: the latest audited financial statements
including the income and balance sheets of the Issuer
and its Material Subsidiaries have been prepared on a
basis consistently applied in accordance with
generally accepted accounting principles in Malaysia
and give a true and fair view of the results of their
operations for that year and the state of their affairs at
- 55 -
that date;
(i)
Material change in financial condition: there has been
no change in the financial conditions of the Issuer or
its Material Subsidiaries since the date of its last
audited financial statements which might have a
Material Adverse Effect;
(j)
Information: (i) the Issuer has disclosed in writing to
the Lead Arranger and the Facility Agent all facts
relating to the Issuer and its subsidiaries which the
Issuer knows or should reasonably know and which
would have been material for disclosure to the Lead
Arranger and the Facility Agent in the context of the
issuance of the Notes and all such information is true
and accurate in all material aspects, (ii) the Information
Memorandum contains all information with respect to
the Issuer and its subsidiaries which is material in the
context of the issue of the Notes as at the date of issue
of the Information Memorandum (including all
information which, according to the particular nature of
the Issuer, is necessary to enable investors and their
professional advisors to make an informed assessment
of the financial position and prospects of the Issuer and
its subsidiaries) as the date of issue of the Information
Memorandum, (iii) the statements of fact contained in
the Information Memorandum relating to the Issuer and
its subsidiaries are and in the case of any supplement to
the Information Memorandum will be at the date of its
publication true and accurate in all material respects and
not misleading in any material respect and there are no
other material facts in relation to the Issuer and its
subsidiaries the omission of which would in the context
of the issue of the Notes make any statement in the
Information Memorandum misleading in any material
way, (iv) the statements of intention, opinion, belief or
expectation contained in the Information Memorandum
are and in the case of any supplement to the Information
Memorandum will be at the date of its publication
honestly and reasonably made or held and (v) all
reasonable enquiries have been made to ascertain such
facts, as are material for the purposes aforesaid and to
verify the accuracy of all such statements. In respect of
the Issuer’s subsidiaries incorporated outside of
Malaysia, the representations in this sub-clause (j) are
given to the best of the Issuer’s knowledge and belief,
after having made all reasonable enquiries;
(k)
Events of Default: there exists no event or
circumstance which is or could, with the passing of
time, the giving of notice, the making of any
determination, or any combination thereof, constitute
an Event of Default;
- 56 -
(l)
Dissolution: to the best of its knowledge upon
reasonable enquiry being made, no step has been
taken by the Issuer or its shareholders nor have any
legal proceedings been started or threatened for the
dissolution of the Issuer; or for the appointment of a
receiver, trustee or similar officer of the Issuer or its
assets which could have a Material Adverse Effect
and no step has been taken by any of its Material
Subsidiaries or the Issuer nor have any legal
proceedings been started or threatened for the
dissolution of any of its Material Subsidiaries or for
the appointment of a receiver, trustee or similar
officer of any of its Material Subsidiaries or their
respective assets which could have a Material Adverse
Effect;
(m) No Immunity: the Issuer is subject to civil and
commercial law with regard to its obligations under
the Transaction Documents and the execution,
delivery and performance of the Transaction
Documents constitute private and commercial acts
rather than governmental or public acts and neither the
Issuer nor any of its properties enjoy any immunity on
the grounds of sovereignty or otherwise in respect of
its obligations under the Transaction Documents;
(n)
Conduct of Business: each of the Issuer and its
Material Subsidiaries is conducting its business and
operations in compliance with all applicable laws and
regulations and all directives of governmental
authorities having the force of law, (other than any
non compliance which does not have a Material
Adverse Effect);
(o)
Section 62 of the Banking and Financial Institutions
Act, 1989: to the best of its knowledge, none of the
directors of the Issuer is related to any director or
officer or employee of the Lead Arranger currently
either as a parent, spouse or child so as to result in
contravening Section 62 of the Banking and Financial
Institutions Act, 1989 and the Issuer undertakes to
advise the Lead Arranger immediately upon the Issuer
becoming aware that any directors is related to any
director or officer or employee of the Lead Arranger
currently either as a parent, spouse or child;
(p)
Status of Notes: under the laws of Malaysia in force at
the date hereof, the Notes when issued shall constitute
direct, unconditional, unsecured and unsubordinated
obligations of the Issuer and shall rank at least pari
passu with all other present and future unsecured and
unsubordinated obligations of the Issuer with the
exception of that which is preferred by law;
- 57 -
(q)
Insurances: each of the Issuer and its Material
Subsidiaries has taken out and maintains all necessary
insurances against such risks and to such extent as is
usual for companies carrying on a business such as
that carried on by the Issuer and/or its Material
Subsidiaries with licensed underwriters or insurance
companies and the Issuer or such Material Subsidiary
has not received any notification from the insurers that
would entitle any insurer to avoid or reduce its
liability under any of the insurances required for the
operation of their respective businesses and which
might have a Material Adverse Effect, such insurances
have been effected and are valid and binding and in
full force and effect and all premiums due have been
paid;
(r)
Section 176 of the Companies Act, 1965 of Malaysia:
to the best of its knowledge upon reasonable enquiry
being made, no step has been taken by the Issuer, its
creditors or any of its shareholders or any other person
on its behalf nor have any legal proceedings or
applications been started or threatened under section
176 of the Companies Act, 1965 of Malaysia and no
step has been taken by any of its subsidiaries (other
than subsidiaries incorporated outside Malaysia), its
creditors or the Issuer or any other person on behalf of
such subsidiary nor have any legal proceedings or
applications been started or threatened under section
176 of the Companies Act, 1965 of Malaysia; and
(s)
Ownership of Assets:
it is legally and beneficially
entitled to all the assets, free from any mortgage,
charge, pledge or security interest other than as
permitted as set out in the paragraph below on
Negative Pledge.
“Material Adverse Effect” means, in relation to an event
or circumstance, the occurrence or effect of which (in the
reasonable opinion of the Trustee) may have a material
adverse effect on:
(a)
the business or condition, financial or otherwise, of
the Issuer and/or its Material Subsidiaries taken as a
whole, or
(b)
the ability of the Issuer to perform any of its -material
obligations under any provision of the Transaction
Documents, or
(c)
the rights of or benefits available to the Trustee and/or
the Noteholders under any provision of the
Transaction Documents.
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“Material Subsidiary” means, at any time, a subsidiary
of the Issuer (other than a subsidiary which is
incorporated outside Malaysia) which:
(a)
has tangible net assets representing 5% or more of
Consolidated Net Tangible Assets of the Issuer
excluding Maxis Mobile Sdn Bhd so long as its
main business is to provide corporate support and
service to the Issuer and its subsidiaries and to
carry out the Universal Service Provision project,
or
(b)
has annual turnover representing 5% or more of the
annual consolidated turnover of the Issuer and all
its subsidiaries,
in each case calculated on a consolidated basis and
“Material
Subsidiaries”
shall
be
construed
accordingly.
“Consolidated Net Tangible Assets” means the aggregate
of the Issuer’s consolidated equity share capital and
reserves after deducting goodwill and other intangibles.
Events of Default
:
Customary Events of Default shall apply and shall include
the following:
(a)
Failure to Pay: the Issuer fails to pay the face amount
or any interest payable under the Notes within 3
Business Days from the due date;
(b)
Other Obligations:
(i)
the Issuer fails to duly perform or comply with
its obligations expressed to be assumed by it in
any provision in the Notes, the Transaction
Documents or under any undertaking or
arrangement entered into under the Programmes
or the Transaction Documents (other than an
obligation of the type referred to in (a) above
and in the paragraph on Positive Covenants –
Conduct of Business below) and such failure, if
in the opinion of the Trustee is capable of
remedy, has not been remedied within 30 days
after receipt by the Issuer of a written
notification from the Trustee of such failure; or
(ii)
the Issuer fails to duly perform or comply with
its obligations expressed to be assumed by it in
the paragraph on Positive Covenant – Conduct
of Business below and such failure might have a
Material Adverse Effect and if in the opinion of
the Trustee is capable of remedy, has not been
remedied within 30 days after receipt by the
Issuer of a written notification from the Trustee
- 59 -
of such failure;
(c)
Misrepresentation: any representation or warranty,
made or given by the Issuer in the Transaction
Documents or which is contained in any document,
certificate or statement furnished at any time pursuant
to the terms of the Notes and/or any of the Transaction
Documents is certified by the Trustee to have been
incorrect in any material respect on or as of the date
made or deemed made;
(d)
Cross Default: (i) where any indebtedness for
borrowed moneys of the Issuer and/or any of its
subsidiaries (other than subsidiaries incorporated
outside Malaysia) exceeding USD 50.0 Million or its
equivalent in any other currency becomes due and
payable prior to its stated maturity or is not discharged
at maturity or where the security created for such
indebtedness for borrowed moneys becomes
immediately enforceable; or (ii) where the issuer
and/or any of its subsidiaries (other than subsidiaries
incorporated outside Malaysia) is unable to meet its
obligations under a guarantee exceeding USD 50.0
million or its equivalent in any other currency, which
has become due and payable;
(e)
Insolvency and Rescheduling: the Issuer and/or any of
its subsidiaries (other than subsidiaries incorporated
outside Malaysia) is for the purposes of section 218 of
the Companies Act 1965 unable to pay its debts as
they fall due, commences negotiations with any one or
more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or
makes a general assignment for the benefit of or a
composition with its creditors or a moratorium shall
be declared on any of its indebtedness or a scheme of
arrangement has been instituted against the Issuer
and/or any of its subsidiaries (other than subsidiaries
incorporated outside Malaysia) pursuant to section 176
of the Companies Act 1965 of Malaysia;
(f)
Winding-up: a winding up order has been made
against the Issuer or the Issuer and/or any of its
subsidiaries (other than subsidiaries incorporated
outside Malaysia) takes any corporate action or other
steps are taken for the winding-up, dissolution,
administration or re-organisation of the Issuer and/or
any of its subsidiaries (other than subsidiaries
incorporated outside Malaysia) (except where any such
step is of a vexatious or frivolous nature (and are
either dismissed within 30 days of such corporate
action being taken or such legal proceedings being
commenced or an opinion of counsel (acceptable to
the Facility Agent/Trustee) is provided opining that
such legal proceedings are of a vexatious or frivolous
- 60 -
nature)) or a receiver, liquidator, administrator or
similar officer has been appointed over the whole or a
substantial part of the assets of the Issuer and/or any
subsidiary of the Issuer (other than subsidiaries
incorporated outside Malaysia);
(g)
Execution or Distress: any execution or distress is
levied against, or an encumbrancer takes possession
of, the whole or any substantial part of, the property,
undertaking or assets of the Issuer and/or any of its
subsidiaries (other than subsidiaries incorporated
outside Malaysia) and is not discharged or stayed
within 21 days;
(h)
Analogous Events: any event occurs which under the
laws of any applicable jurisdiction has a similar or
analogous effect to any of those events mentioned in
paragraph (e), (f), or (g);
(i)
Governmental Intervention: by or under the authority
of any government: (i) the management of the Issuer
is wholly or substantially displaced or the authority of
the Issuer in the conduct of its business is wholly or
substantially curtailed or (ii) all or a majority of the
registered capital of the Issuer or the whole or a
substantial part of its revenues or assets is seized,
nationalised, expropriated or compulsorily acquired;
(j)
Revocation, Withholding or Modification of Consents:
any consent, authorisation, licence or approval of,
registration with or declaration to governmental or
public bodies or authorities or courts in Malaysia (if
any) required by the Issuer to authorise or required by
the Issuer in connection with the execution, issue, sale,
delivery, validity, enforceability or admissibility in
evidence of the Notes or the Transaction Documents or
the performance by the Issuer of its obligations under
any of the Transaction Documents is not granted or is
revoked or terminated or expired and is not renewed or
ceases to be in full force and effect or is modified to
such degree as would in the opinion of the Trustee
impair or prejudice the Issuer’s ability to comply with
the terms and conditions of the Notes or any of the
Transaction Documents to which it is a party or be
prejudicial to the interests of the Noteholders;
(k)
Validity, Admissibility and Illegality: at any time it is
or becomes unlawful for the Issuer to perform or
comply with all or any of its obligations under the
Programme or the Notes or any of the Transaction
Documents or any obligations of the Issuer under the
Programme or the Notes or any of the Transaction
Documents cease to be legal, valid and binding or any
act, condition or thing required to be done, fulfilled or
performed or maintained in order: (i) to enable the
- 61 -
Issuer lawfully to enter into, exercise its rights under
and perform the obligations expressed to be assumed
by it in the Notes and any Transaction Document; (ii)
to ensure that the obligations expressed to be assumed
by the Issuer in the Notes and any Transaction
Document are legal, valid and binding; or (iii) to make
the Notes and any Transaction Document admissible
in evidence in Malaysia is not done, fulfilled or
performed or maintained;
(l)
Relevant Consents:
at any time:
(i)
any relevant consent is not, or ceases to be,
binding on any person expressed to be party to it
and otherwise in full force and effect prior to its
originally stated expiry date for any reason
whatsoever (including, without limitation,
suspension, termination and revocation) which
has or would have a Material Adverse Effect on
the Issuer (as certified by the Trustee) unless the
same has been replaced by an appropriate
replacement; or
(ii)
any relevant consent is modified in a manner
which has or would have a Material Adverse
Effect on the Issuer (as certified by the Trustee)
unless the same has been replaced by an
appropriate replacement; or
(iii) any breach or default occurs under any relevant
consent which has a Material Adverse Effect on
the Issuer (as certified by the Trustee);
(m) Judgment Passed: the Issuer and/or any of its
subsidiaries (other than subsidiaries incorporated
outside Malaysia) fails to satisfy any judgment with a
value of RM10 million and above passed against it by
any court of competent jurisdiction and no appeal
against such judgment has been made to any
appropriate appellate court within the time prescribed
by law or such appeal has been dismissed; or
(n)
Material Adverse Change: any event occurs which in
the opinion of the Trustee has or could have a
Material Adverse Effect on the Issuer and in the case
of the occurrence of such event which in the opinion
of the Trustee is capable of being remedied, has not
been remedied within 30 days after receipt by the
Issuer of a written notification from the Trustee of the
event or circumstance.
- 62 -
Covenants
:
Positive Covenants
The Issuer shall covenant that, so long as any Notes remain
outstanding, it shall, unless it has obtained the approval of
the Noteholders by way of a Special Resolution or the prior
written approval of the Trustee:
(a)
Compliance: comply with, perform and observe the
relevant provisions of the Securities Commission Act
and all practice notes, circulars or guidelines issued by
the Securities Commission from time to time in relation
to the Notes, the Companies Act, 1965, and all of the
provisions of the Trust Deed;
(b)
Authorisations and Relevant Consents: take, fulfil or do
or procure to be taken, fulfilled or done and maintain in
full force and effect, all relevant consents and other
actions, conditions or things (including the obtaining or
effecting of any necessary consents, approvals,
authorisations, exemptions, filings, licences, orders,
recordings or registrations at any time required to be
taken, fulfilled or done) (i) to enable the Issuer lawfully
to enter into, exercise its rights and perform and comply
with its obligations under the Notes and the Transaction
Documents, (ii) to ensure that those obligations are
legally binding and enforceable and (iii) to enable the
Notes and the Transaction Documents to be admissible
in evidence in the courts of Malaysia;
(c)
Compliance with Transaction Document: comply with its
obligations under the Transaction Documents and
immediately notify the Trustee in the event that the
Issuer is unable to fulfil or comply with any of its
material obligations herein or therein;
(d)
Conduct of Business: at all times exercise reasonable
diligence to carry on and conduct its business in a
proper and efficient manner and in accordance with
sound financial and commercial standards and practices
including ensuring that all necessary approvals or
relevant licences are obtained and/or renewed;
(e)
Access to Accounting Records: keep, and procure that
each of its Material Subsidiaries keep, books of account
as necessary to comply with all applicable laws and:
(i)
make available to the Trustee and any person
appointed by them for their inspection the whole
of the accounting and other records of the Issuer
and its Material Subsidiaries subject to 48 hours
prior written notice; and
(ii)
give to them such information as they may
reasonably require with respect to all matters
relating to the accounting and other records of the
- 63 -
Issuer and its Material Subsidiaries;
(f)
Notice of Payment: maintain a paying agent in Malaysia
and procure that the Paying Agent notify the Trustee
forthwith if, by the due date for any payment in respect
of the Notes, unconditional payment has not been made
to the account of the Paying Agent in the place and in
the manner provided by the Agency Agreement or the
Trust Deed of the full amount of the moneys payable on
such date in respect of all such Notes;
(g)
Ranking: ensure that the claims of the Noteholders
over the assets of the Issuer will rank at least equally
and rateably (pari passu) in point of priority and
security with the claims of all other unsecured and
non-subordinated creditors of the Issuer; save for
those preferred solely by any bankruptcy, insolvency,
liquidation or other similar laws of general application
and/or liabilities which are subject to lien or rights of
set off arising in the ordinary course of trading;
(h)
Approved Accounting Standards: prepare, and procure
that each of its Material Subsidiaries prepares, its
financial accounts on a basis consistently applied in
accordance with approved accounting standards in
Malaysia and ensure that these financial accounts shall
give a true and fair view of the results of the operations
of the Issuer or such subsidiary, as the case may be, for
the period in question;
(i)
Insurances: take out and maintain necessary insurances
with reputable underwriters or insurance companies
against such risks and to such extent as is usual for
companies carrying on a business such as that carried on
by the Issuer and procure that each of its Material
Subsidiaries takes out and maintains necessary
insurances with reputable underwriters or insurance
companies against such risks and to such extent as is
usual for companies carrying on a business such as that
carried on by such subsidiary and promptly notify the
Trustee of any event which may give rise to any claim
or right of action under any of the insurances and which
might have a Material Adverse Effect on the Issuer;
(j)
Information: it shall deliver to and/or notify the
Trustee:
(i)
as soon as they become available (and in any
event within 180 days after the end of each of its
financial year) a copy of its financial statements
for that period which shall contain an income
statement and a balance sheet and be audited and
certified by a firm of independent accountants
together with a certificate signed by a duly
authorised officer of the Issuer confirming that
- 64 -
the Issuer has complied with its obligations
under the Trust Deed and the terms and
conditions of the CP and/or MTN and:
(ii)
(a)
no Event of Default has occurred and is
subsisting since the date of the Trust Deed
and in respect of subsequent certificates,
since the date of the last certificate; or
(b)
in the event that an Event of Default has
occurred, full details of the Event of
Default and of the remedial action being
taken or proposed to be taken;
as soon as they become available (and in any
event within 90 days after the end of each half of
its financial year) the unaudited management
financial statements for that period together with
a certificate signed by a duly authorised officer
of the Issuer confirming that such financial
statements present a true and fair view of the
results of the operations of the Issuer for the
period in question;
(iii) as soon as practicable, any information which
the Trustee may from time to time reasonably
require in order to discharge its duties and
obligations as trustee under the Trust Deed
relating to the Issuer’s affairs to the extent
permitted by law;
(iv)
as soon as practicable, such additional financial
or other information (including but not limited
to information relating to the Issuer’s business
and operations) as the Trustee may from time to
time reasonably request to the extent permitted
by law;
(v)
as soon as practicable, all documents (including
accounts, reports, notices, statements or
circulars) issued and/or despatched by the Issuer
to its shareholders (or any class thereof) in their
capacity as shareholders which contents may
materially prejudice the interest of the
Noteholders;
(vi) immediately upon the Issuer being aware, any
substantial change in the nature of the business
of the Issuer;
(vii) immediately upon the Issuer being aware, any
change in the utilisation of proceeds from the
Notes;
- 65 -
(viii) immediately upon the Issuer being aware, any
change in the Issuer’s withholding tax position
or taxation jurisdiction;
(k)
Event of Default or Material Adverse Effect: it shall,
immediately upon becoming aware of the same,
inform the Trustee:
(i)
of any Event of Default or such other right or
remedy which under the terms, provisions and
covenants of any of the Transaction Documents
has become immediately enforceable and
provide the Trustee with full details of any steps
which it is taking, or is considering taking, in
order to remedy or mitigate the effect of the
Event of Default or such event or otherwise in
connection with it and shall take such steps as
may have been notified by the Trustee
following the occurrence of an Event of Default
or such event to remedy or mitigate the effect of
that Event of Default or such event or any other
step as the Trustee may reasonably request; and
(ii)
any other matter or circumstance that has
occurred that may materially prejudice the
Issuer or any of the Transaction Documents or
the interests of the holders of the Notes.
Negative Covenants
(a)
Disposals: ensure that the Issuer and/or its Material
Subsidiaries shall not, sell, lease, transfer or otherwise
dispose of, by one or more transactions or series of
transactions (whether related or not), the whole or a
substantial part of its revenues or its assets other than:
(i)
in the ordinary course of business on arms length
terms;
(ii) disposal of equipment which the Issuer or, as the
case may be, such subsidiary, has in accordance
with its usual practice determined as being either
obsolete or worn out; and
(iii) disposal of assets which the Issuer or as the case
may be, such subsidiary, now own or hereafter
acquire and such disposal is made pursuant to an
internal rationalisation or reorganisation of the
Issuer and its subsidiaries;
(b)
Related Party Transactions: not enter into a
transaction, whether directly or indirectly with any
interested persons (including a director, a substantial
shareholder or persons connected with them) unless:
- 66 -
(i)
such transaction shall be on terms that are no
less favourable to the Issuer than those which
could have been obtained in a comparable
transaction from persons who are not interested
persons; and
(ii)
with respect to a transaction involving an
aggregate payment or value equal to or greater
than 25% of the Consolidated Net Tangible
Assets of the Issuer as set out in its latest
published audited accounts), the Issuer obtains
certification from an independent adviser
reasonably acceptable to the Trustee that the
transaction is carried out on fair and reasonable
terms,
and the Issuer has certified to the Trustee to the
effect stated in sub-paragraphs (i) and (ii) above
and that transaction has been approved by the
majority of the board of directors or shareholders
in a general meeting, as the case may require;
For the purpose of this sub-clause (b), an
“interested person” shall not include a company in
which the Issuer holds, directly or indirectly, 20%
or more of the issued share capital, provided that a
transaction between the Issuer and such company
is permitted under the Companies Act 1965 and
the Listing Requirements of Bursa Malaysia
Securities Berhad;
(c)
No Loans or Advances: save as permitted under the
Companies Act 1965 or the Listing Requirements of
Bursa Malaysia Securities Berhad, not, and procure
that its subsidiaries (other than subsidiaries incorporated
outside Malaysia) do not:
(i) other than any loan, credit, guarantee or indemnity
made, granted or given in the ordinary course of
business, make any loans, grant any credit or give
any guarantee or indemnity to or for the benefit of
any persons in excess of 25% of the Consolidated
Net Tangible Assets of the Issuer; or
(ii) otherwise voluntarily assume any liability, whether
actual or contingent, in respect of any obligation of
any other person,
other than a loan to its related corporations;
(d)
No Change in Business: not make any change to the
business that it is currently carrying on which might
have a Material Adverse Effect and procure that there
is no change to the business that its Material
Subsidiaries are currently carrying on which might
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have a Material Adverse Effect;
Negative Pledge
:
(e)
Maintenance of Memorandum and Articles of
Association: save as required under the Listing
Requirements of Bursa Securities not permit any
amendment, supplement or variation to the
Memorandum and Articles of Association of the Issuer
as at the date of the Transaction Document which would
have a Material Adverse Effect;
(f)
No Assignment: not assign its rights or transfer its
obligations under the Notes and/or the Transaction
Documents;
(g)
No Winding-Up or Merger: not, and procure that its
Material Subsidiaries shall not (i) take any corporate
action or other voluntary steps with a view to its
winding-up, dissolution, administration or reorganisation or for the appointment of a liquidator,
receiver, administrator, administrative receiver,
custodian, trustee or similar officer of it or of any or
all of its revenues and assets; or (ii) save and except
for any reorganisation within the Issuer and its
subsidiaries, enter into or effect any merger,
restructuring, re-organisation or consolidation with
any other person which would have a Material
Adverse Effect;
(h)
No Reduction of Capital: save and except for any
share buyback in compliance with the Companies Act
1965 and/or any redemption of any redeemable
preference shares Provided that such buyback or
redemption will not result in a Material Adverse
Effect, not, and procure that its subsidiaries (other than
subsidiaries incorporated outside Malaysia) do not,
redeem any of its equity or otherwise reduce or repay
any of its equity.
So long as any Notes remain outstanding, the Issuer shall
not, and shall procure that its Material Subsidiaries shall
not, create or permit to subsist any mortgage, charge, pledge
or other security interest over the whole or any part of its
undertakings, assets, property or revenues, present or future,
to secure any borrowings or indebtedness with the
exception of:
(i)
liens arising by operation of law or created in the
ordinary course of business (which includes liens
arising from the Issuer’s and/or its Material
Subsidiaries’ vendor financing provided it does not
exceed 25% of the Consolidated Net Tangible Assets
of the Issuer as reflected in the latest audited financial
statements of the Issuer);
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(ii)
pledges created in relation to documentary credits,
trust receipts and bankers acceptances opened in the
ordinary course of trading;
(iii) leasing arrangements or hire purchase transactions;
(iv) security created in respect solely of indebtedness
incurred or assumed for the purpose of financing the
purchase price of any asset (including but not limited
to shares), in each case, created solely over such asset;
(v)
security created in respect of liabilities which exist on
any property or asset prior to its acquisition by the
Issuer or its subsidiary or arising after such acquisition
pursuant to contractual commitments entered into
prior to, but not in connection with or in
contemplation of, such acquisition.
Taxation
:
All payments by the Issuer shall be made without withholding
or deductions for or on account of any present or future tax,
duty or charge of whatsoever nature imposed or levied by or
on behalf of Malaysia, or any authority thereof or therein
having power to tax, unless such withholding or deduction is
required by law, in which event the Issuer shall gross up for
any such deductions or withholdings save and except that the
Issuer will not be liable to gross up for any withholding and/or
additional tax payable by any Noteholder (i) who is a nonresident (other than financial institutions and other institutions
which come within the jurisdiction of the Labuan Offshore
Financial Services Authority) or (ii) where such payment is on
the Noteholder’s overall net income and in any of such Notes
instance, any withholding and/or additional tax payable will
be borne by the Noteholder.
Governing Laws and Jurisdiction
:
Malaysia.
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APPENDIX II
AUDITED FINANCIAL STATEMENT FOR FINANCIAL YEAR ENDED 31
DECEMBER 2005
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REGISTERED OFFICE OF THE ISSUER
MAXIS COMMUNICATIONS BERHAD
(Company No. 158400-V)
Level 18, Menara Maxis
Kuala Lumpur City Centre
Off Jalan Ampang
50088 Kuala Lumpur
Tel: (603) – 2330 7000
Fax: (603) – 2330 0590