Green Packet subsidiary Packet One to raise RM151.24m, seeks new investor

KUALA LUMPUR: GREEN PACKET BHD’s 55% owned loss-making Packet One (P1) has proposed to raise up to RM151.12 million from the issuance of preference shares and with the injection of funds from a new investor to finance its nationwide fourth generation (4G) rollout.

Green Packet said on Monday, May 16 that substantial shareholder South Korean Telekom Co. Ltd was asked to subscribe for 153,276 class C Islamic irredeemable convertible preference shares (ICPS-i) for RM50.53 million.

Green Packet has also proposed that Intel Capital Corp -- which currently holds RM50 million nominal value of guaranteed redeemable convertible exchangeable bonds -- to subscribe for Class B Irredeemable Convertible Preference Shares (ICPS) valued at RM10.12 million.

It said that it would also seek a new investor to provide a loan of at least RM50 million to P1, which may be converted into equity in P1 with rights.

As for Green Packet, it said that it had already invested RM91 million in P1 to fund the latter’s operating expenses including subscribers acquisition costs including purchases of customer premise equipment, marketing and promotional expenses, and administrative.

“If either the new investor and/or the bondholder does not invest at least RM50 million and approximately RM10.12 million respectively in P1, Green Packet undertakes to make up for any shortfall in the investment amounts by investing an amount equal to such part of those amounts that was not invested by the new investor and/or the bondholder respectively,” it said.

The gross proceeds of at least RM110.65 million would be utilised by P1 for its deployment of WiMAX network and services in Malaysia.

Of the RM110.65 million, Green Packet said RM50 million would be used as capital expenditure for wireless internet broadband equipment and deployment costs while RM60.44 million would be for operating expenses and working capital.

“The proposed issuance will help expedite P1’s nationwide fourth generation (4G) rollout to reach 65% population coverage by 2012 and also contribute to P1’s key priorities of optimising its network and customer satisfaction, further enabling it to deliver high quality broadband to everyone in Malaysia,” it said.