KUALA LUMPUR, Aug 17 (AFP) - Malaysia's state investment arm Khazanah Nasional said Wednesday it plans to team up with Telekom Malaysia to buy a 12.06 percent stake in Singapore's MobileOne for 260.8 million Singapore dollars (158 million dollars).
"The proposed investment provides an excellent platform for exposure into an important market, in line with the continued selective regionalisation of Malaysian companies," it said in a statement.
Khazanah said the joint venture, known as SunShare, struck a deal with Great Eastern Telecommunications to acquire its 12.06 percent stake at 2.20 Singapore dollars per share, for a total sum of 260.8 million Singapore dollars.
MobileOne Ltd is Singapore's second-largest mobile phone operator, and the seller Great Eastern Telecommunications is a joint venture between Cable and Wireless and PCCW-HKT.
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When completed, SunShare will hold an estimated 17 percent stake in MobileOne, including the almost 5.0 percent stake that it holds already.
SPH Multimedia and Keppel Telecommunications and Transportation, a unit of conglomerate Keppel Corp, each hold a 14.1 percent stake in MobileOne.
MobileOne said in a statement that it "warmly welcomes" the announcement.
"Telekom Malaysia is a leading regional information and communications provider and will be an important strategic partner for M1," M1 chief executive Neil Montefiore said in a statement.
"Both companies are currently members of the Asian Mobility Initiative and have already established a good working relationship. With Telekom Malaysia taking a stake in M1, we look forward to strengthening as well as deepening this relationship."
Analysts said Khazanah and Telekom Malaysia's investment foray into Singapore demonstrated improving ties between the two neighbours.
"It does reflect that two countries are enjoying better ties now," Hwang-DBS Vickers analyst Boon Leong told AFP.
The two nations have struggled with an uneasy relationship since Singapore's ejection from the Malaysian federation in 1965.
But in April the tide turned when the neighbours reached a resolution to one of several vexed issues -- signing an agreement settling a long-running dispute over land reclamation works.
Officials from both sides said they were optimistic the other issues could also now be amicably resolved.
Telekom Malaysia chief executive officer Abdul Wahid said it expects to secure the necessary approval for the proposed acquisition from the InfoComm Development Authority of Singapore at around the end of the year.
Telekom would ask for board representation in MobileOne once the deal was completed, he told reporters.
"The number of seats (on the board) will be proportionate to our equity stake. We need to finalise that later," he said.
Wahid said SunShare would finalise the acquisition through equity and Singapore-dollar denominated debt.
Telekom Malaysia said in a statement to Bursa Malaysia that SunShare would fund the stake acquisition through an injection of capital by its shareholders and borrowings.
"It allows Telekom Malaysia to expand its regional footprint in Southeast Asia, where it has already made several key strategic investments," it said.
Khazanah said the proposed acquisition would be made together with TM International Sdn Bhd, a wholly-owned investment arm of national telecommunications firm Telekom Malaysia.
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