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Battle over Time.Com
Telekom Backs Sapura
Swisscom
SingTel
NTT
Last Update:
10 May, 2000
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The Edge
Telekom backs Sapura By C S Tan |
It did not come as a surprise that
Telekom Malaysia was one of Time Engineering Bhd group’s creditors that tried to deny
the extension of court protection to Time.
Four creditors — Telekom, Uniphone Telecommunications, Universal Trustees and
Aseambankers — objected last Friday when Time applied for a fifth extension of court
protection under Section 176 of the Companies Act. Uniphone is a member of the Sapura
group which is making a hostile bid for Time dot.Com Bhd, the telecommunications division
of Time Engineering.
Observers say it will also not come as a surprise if Telekom had lobbied the government to
reject Time Engineering’s debt-restructuring scheme and its acceptence of Singapore
Telecommunications Ltd (SingTel) as a strategic partner in Time dotCom.
A tie-up between Time dot.Com and SingTel could cause Telekom to lose a substantial amount
of telecommunications traffic between Malaysia and Singapore as SingTel would channel the
traffic through Time’s fibre-optic cables instead of Telekom’s lines. It is only
to be expected that Telekom would prefer Sapura to gain control of Time.
Sapura, too, will eventually probably bring a foreign strategic partner into Time dot.Com,
but that is likely to be other multinational telcos rather than SingTel. According to
Theedge.com, Sapura’s strategic partner will be Hong Kong-based Hutchison Whampoa
Ltd, although it now appears that the latter may enter in Act 2 of the play.
As Telekom appears in court as a creditor, it is obviously owed some money by Time but
that is small change compared with the potential loss of traffic should SingTel join hands
with Time.
Other Malaysian telcos like Celcom, Maxis and Digi are also likely to be creditors of
Time, even though the biggest creditors are the banks. For these telcos, a quick
resolution of Time’s debt-restructuring scheme is preferred because they are owed
significant sums. These debts probably arose out of inter-connection fees as traffic from
Time crossed into their lines.
They are unlikely to be grinning over Time’s problems considering that they are
creditors. Further delays towards a restructuring scheme will, of course, keep one rival
at a disadvantage, but the choice between Time’s own scheme and Sapura’s offer
may be made quite soon.
If Time Engineering loses control of Time dot.Com, that would also spell the demise of
SingTel’s position there. It would be a double blow for the Singapore national telco,
considering that it lost embarrassingly in an earlier bid for Hong Kong Telecom.
Then, Hongkies gloated that Singapore companies are run by civil servants like Brigadier
General Lee Hsien Yang, the younger son of Senior Minister Lee Kwan Yew, who heads
SingTel. The local Press in Hong Kong claimed victory for its own son, Richard Li, head of
Pacific Century CyberWorks (PCCW) which won the bid for Hong Kong Telecom. Hong Kong’s
business community, led by entrepreneurs, outclassed Singapore’s civil servants, they
trumpeted.
But the Singaporeans are not pushovers. They build cash-rich companies as opposed to the
paper wealth that Li amassed. News reports late last week say SingTel could be preparing a
counter-bid for Hong Kong Telecom following PCCW’s share price weakness, which
damages its ability to use its currency of shares to purchase assets.
It’s a battle of tycoons and corporate titans. Here, Time’s chief Tan Sri Halim
Saad is defending his turf from an unwelcome bid by Sapura’s Datuk Shahril
Shamsuddin. In the regional arena, SingTel and the Li family (through Hutchison and PCCW)
are using their wealth to buy into telcos in Hong Kong and Malaysia. |
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