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Clifford Chance advises Telekom Malaysia on investment agreement with Green Packet and SK Telecom to develop next-generation converged communications services

16 April 2014

Clifford Chance advises Telekom Malaysia on investment agreement with Green Packet and SK Telecom to develop next-generation converged communications services

International law firm Clifford Chance has advised Telekom Malaysia Berhad (TM), a leading fixed-line and broadband provider in Malaysia, on the international aspects of its investment agreement with Green Packet Berhad, a global player in 4G devices, and SK Telecom Co. Ltd., the top South Korean mobile operator in one of the most advanced LTE markets globally, to offer customers a full suite of converged communications services through the development of next-generation Long Term Evolution (LTE) infrastructure.

As part of the investment agreement, TM will initially invest RM350 million into Packet One Networks (Malaysia) Sdn Berhad (P1) through the subscription of new ordinary shares to make TM the majority shareholder with an estimated 57% stake, while Green Packet and SK Telecom remain as key strategic shareholders of P1 upon completion. TM will additionally invest up to RM210 million into Green Packet through newly issued redeemable exchangeable bonds, which may be exchanged into Green Packet’s stake in P1 in the future. In addition, TM, SK Telecom and Green Packet will have the option to invest up to RM1.65 billion through the subscriptions for convertible bonds issued by P1 for the implementation of P1's business plan. The transaction is subject to regulatory and Green Packet shareholder approvals.

"We are delighted to assist Telekom Malaysia with its strategic investment in P1," commented Corporate partner Lee Taylor who led the deal. "While a few Asian markets already benefit from the speed 4G technology provides, much of South East Asia has just started to offer customers access and improved mobile Internet experiences through 4G in the next few years."

Lee was supported by senior associate Andrew Heng in Singapore. London Corporate partner Daniel Sandelson and associate James Plummer advised on the collaboration and technical agreements which may be entered into pursuant to the investment agreement, including spectrum leasing and fibre supply arrangements and the supply of consulting and other services. Wong & Partners acted as the Malaysian transaction counsel to TM for the proposed investment.