Green Packet looking to sell P1
Business & Markets 2012
Written by Max Koh of theedgemalaysia
Wednesday, 17 October 2012 09:16
KUALA LUMPUR: GREEN PACKET BHD [] is looking to exit the broadband service business by selling its entire 61% stake in Packet One Networks (M) Sdn Bhd (P1).
The company is said to have received bids to purchase the shareholding in P1, said executives familiar with the matter.
“Five parties have submitted their bids for P1. Three of the bidders are a foreign party and two local telcos,” he told The Edge Financial Daily.
When contacted, the executive with Green Packet said: “We will make the necessary announcements when the time comes.”
Green Packet group CEO CC Puan could not be reached for comments as he is abroad.
Analysts noted that while P1 is considered a core business for Green Packet, the former has continued to bleed losses since 2006 and only managed to achieve positive earnings before interest, tax, depreciation and amortisation (Ebitda) earlier this year.
“The broadband business requires heavy capital expenditure and it will take some time for it to gestate,” said an analyst, adding that competition is growing in the broadband segment.
According to the filing with the Companies Commission of Malaysia (CCM), Green Packet holds a 47.2% stake in P1 and another 13.5% stake indirectly via its wholly owned Packet One Sdn Bhd.
P1 has a total authorised capital of
RM25 million and total issued capital
of RM1.3 million.
Other shareholders include South Korean telco SK Telecom Co Ltd (28.2%), Megan Sinar Sdn Bhd (1.96%), Dutamas Equity Sdn Bhd (2.5%), Dutamas Regal Sdn Bhd (3.7%) and Akar Amanjaya Sdn Bhd (2.9%).
P1 has a total authorised capital of RM25 million and a total issued capital of RM1.3 million.
SK Telecom first emerged as a substantial shareholder of P1 in 2010 when it bought a 26% stake from Green Packet in two tranches for RM374 million. The sale of the strategic sales value P1 at RM1.44 billion. It is not known if SK Telecom is one of the bidders for Green Packet’s stake in P1.
In May last year, SK Telecom and Green Packet invested RM201.6 million in P1 to accelerate its network expansion.
The filings with CCM show that P1 incurred a net loss of RM202.3 million in 2011 on revenue of RM292.7 million.
The significant part of P1’s losses was the depreciation expenses for its wireless broadband equipment and infrastructure.
Green Packet and its warrant were among the top gainers on Bursa Malaysia yesterday.
Green Packet’s share price soared 37% from 40.5 sen last Thursday to close at a five-month high of 55.5 sen yesterday. The counter also saw a spike in volume yesterday with 32.1 million shares traded compared to a daily average of 778,000 shares in the past six months.
Its warrant, Green Packet-WA, soared 44% yesterday to close at 19.5 sen with 37.4 million warrants traded. In the last six months, the warrant’s average daily volume was 542,900.
For the second quarter ended June 30, Green Packet incurred a net loss of RM17.9 million on a revenue of RM138.85 million. Nevertheless, it achieved a positive Ebitda of RM4.3 million for the second consecutive quarter. P1 contributed RM88 million to the group’s revenue and registered a positive Ebitda of RM5.6 million in the same quarter.
After selling off P1, Green Packet will only have its solutions business, which sells software and equipment such as modems to mobile operators.
This article first appeared in The Edge Financial Daily, on Oct 17, 2012.