I was just watching the news and heard that this deal is now is at the last step of approval which is an approval from the SC? I'm not too sure because I couldn't hear it properly. What I want to know when will this deal finally get finalized and what are the steps that are left for it to get finalized.

Secondly, I've been reading around on how many people have been saying to stay away from timecom because of it's gomen links and the fact that the future doesn't look great for timecom now that our political climate has changed to what it is. But I pondered this; how many percent of digi shares will timecom end up with at the end of the deal with digi? I'm not sure...is it 10%? 20%? I'm thinking it is atleast 10% so if this is true, we must assume that the fair value of a timecom share is 10% of a digi share. That would be RM 2.25 or around that. So timecom is trading at RM 0.40 or around that now.....why stay away?

So far if you read the news on DIGI, their investors have already agreed with the proposal to issue up to 27.5 mil new shares to be 'given' to TIMECOM for the 3G spectrum.

The only thing blocking it would be Telenor's stake in DIGI which has to be reduced to below 50% as required by Ministry of Energy, Water and Communication.

DIGI has until June 30 2008 to reduced it's stake.

TIMECOM's gain is about RM600 mil in shares. Not 10% of DIGI, but about 3.5% if the deal goes through. TIMECOM is politically linked, which is how it got the 3G spectrum license even though it doesn't have the capital to pull it through.

TIMECOM has been a loss making company for the past 5 years. Probably because it has nothing to offer and this 3G license is supposed to be their lifeline for new capital.

And it does not mean 3.5% share of DIGI, means TIMECOM share price also must be at least 3.5% of the counter it owns.

This post has been edited by skiddtrader: Mar 13 2008, 10:39 AM

I see. I was under the impression that it already owned 3.5% of digi shares and was due to receive more? Well from my rough calculations, if we value a digi share at RM22.50, 3.5% of that is about RM 0.79 or sorts which still means timecom shares are undervalued at RM 0.40 (if you assume that digi shares aren't overvalued but more fairvalue) . Plus, if i'm not mistaken, khazanah nasional now owns the majority of timecom shares and plans a revamp of their business activities. I understand it all seems doom and gloom for timecom now but I think if we took a look at it more carefully, we'd see there is promise at least to worth RM 0.79 at the moment (but Digi shares will continue to surge which will mean so should timecom's). What will Digi be worth in 5 years? I guess timecom should be worth 3.5% of that. Why not?

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Added on March 13, 2008, 2:35 pmOf course bare in mind i'm talking from the perspective that digi's share is fairvalue and will continue to increase in worth and that timecom will start makin net profit after a revamp of it's business activities. So I feel if these are true then valuing timecom shares as at least 3.5% of digi's is not too far fetched.

This post has been edited by naz_b_85: Mar 13 2008, 02:35 PM

I won't say what you think is wrong but I'm rather opinionated that there are other counters more 'safe' compared to TIMECOM. If you think TIMECOM has some future to it's earnings based on it's future ownership of DIGI shares and think the price will reflect it, then by all means go for it.

Normally counters who announce changes or business revamp without details are as good as having no idea how to go ahead with the revamp in the first place. Looking at it's past 5 year performance, not only is it making a loss, but it's revenue has been dropping as well meaning they are not improving their sales performance.

If 3.5% of DIGI shares equals 3.5% of DIGI profits then its a different matter, but I doubt they have such an agreement. If they did, it would stand to gain about RM37mil yearly based on DIGI's 2007 earnings. The share ownership just increases their assets holding but not their earning potential. Its the same as having plenty of factories but none are making any money.

In the end though, since it is a GLC it wouldn't just go bankrupt since it will most likely be bailed out again. Just my opinion of the matter. As long as you've done your research on the matter and are convinced they are about to turnaround, I would say go with your decision based on the facts.

This is totally wrong! Owning 3.5% of Digi doesn't mean Timedotcom shares would be valued at 3.5% of Digi share price.

(for simple calculation without taking consideration of extra shares being issued due to acquisition of TTdotcom 3G license), just to illustrate how to calculate properly about the valuation.

Digi has share issued of 750 millions, owning 3.5% = 26.25 millions shares
26.25 million x 22.40 = 588 millions

Timecom has 2.5 billions outstanding shares.

So Digi at 22.40 would translate into as 588 millions / 2.5 billion = 0.24 or 24 cents.

So the holding of Digi by Timecom based on Digi price at 22.40 would means value of Rm0.24 for Timecom

Thanks skiddtrader on your input and cherroy on that more in-depth calculation on how the 3.5% translates into timecom's share worth.