Digi signs conditional share subscription agreement for equity stake in DNB

Press Release
October 7, 2022

· To take 12.5% equity stake in DNB, part of the 65% equity divided among 4 MNO investors

· Discussions on access agreements and regulatory frameworks continue to progress with relevant parties

Subang Jaya, 7 October 2022 – The Board of Directors of Digi.Com Berhad (“Digi” or the “Company”) announced in a filing to Bursa Malaysia today that Digi Telecommunications Sdn Bhd (“DigiTel”) has entered into a conditional Share Subscription Agreement (“SSA”) with Digital Nasional Berhad (“DNB”) for the proposed subscription of 100,000 new ordinary shares in DNB (“DNB Shares”) for RM100,000 and 178,471,429 rights to allotment of DNB Shares by DigiTel (“Proposed Subscription”) for RM178.47 million.

This agreement follows the Malaysian Government’s decision in March 2022 to maintain a Single Wholesale Network (“SWN”) model for the country’s planned 5G network rollout via its wholly owned company, DNB, and its subsequent offer of up to 70% equity shareholding in DNB to the country’s mobile network operators (“MNOs”).

This announcement confirms DigiTel’s decision to accept the proposed equity offer in DNB. The SSA is conditional upon, amongst others, the execution of an Access Agreement with DNB; execution of the Shareholder Agreement (“SHA”) between all parties involved; regulatory approvals for changes required to DNB’s licenses and Board Charter to reflect the terms of the equity agreements; and Digi.Com Berhad’s shareholders’ approval with respect to the Proposed Subscription. Upon fulfillment of all conditions set out in the SSA, DigiTel expects to have 12.5% equity stake in DNB – out of the 65% equity offered to all invited MNOs participating in the process, with the Ministry of Finance Inc. (“MoF”) retaining 35% equity in DNB. DigiTel’s equity stake in DNB will increase to 17.5% to be equal with the three other MNO investors in the event the proposed merger between Celcom and Digi does not complete by mid-2023, with MoF’s equity stake decreasing to 30%.

Ongoing discussions on access agreements and regulatory frameworks

In addition to this equity transaction for shareholding in DNB, discussions related to the access agreements and regulatory framework continue to make significant progress with DNB, the Malaysian Communications and Multimedia Commission (“MCMC”), other MNOs and relevant stakeholders. Digi continues to collaborate with all parties to align and finalise terms that would support the provision of affordable and reliable 5G services for Malaysian customers and enterprises in a sustainable manner. More information on this will be shared upon the conclusion of the ongoing discussions.

Digi remains fully committed to contribute towards a successful deployment of 5G for Malaysia and all Malaysians. The Company strongly believes in the value creation of 5G, and its potential benefits to be derived by businesses, customers, and the nation. The Company looks forward to working with the Malaysian Government, MCMC, and industry, lending its expertise in customer insights, supply chain, infrastructure, and experienced technical talents to support the successful rollout of 5G for Malaysia.

For more information on the Proposed Subscription, please refer to the related Bursa Announcement here.