Struggling Malaysian cellco U-Mobile appears to have found itself a new white knight investor - Temasek Holdings-backed Singapore Technologies Telemedia.
U-Mobile’s controlling shareholder U Television, backed by Malaysian investor Vincent Tan, has inked a RM626 million ($183.85 million) preliminary agreement to sell a 33% holding in U-Mobile to STT, said The Star newspaper.
Due diligence has reportedly been completed and the deal could be finalized within a few weeks, according to The Star.
Tan has been seeking a strategic investor for U-Mobile since late last year.
In September, Japanese giant NTT DoCoMo agreed to sell its two-year-old 16.5% holding in U-Mobile to U Television for $100 million.
DoCoMo is believed to have sold out because it wanted U-Mobile to accelerate its investment schedule.
ST Telemedia, the controlling shareholder of Singapore’s no.2 operator, StarHub, would be the third foreign telco to touch U-Mobile.
KTF sold its 16.5% stake to U Television for about $100 million in April 2009.
To finance the DoCoMo-KTF buy-backs, Tan has reportedly pledged shares to AmBank.
In September, AmBank then signed a put option deal with Malaysian conglomerate Multi-Purpose Holdings (MPHB), whereby MPHB can take up to 13 months to buy a 41.63% stake in U-Mobile for RM280 million.
U-Mobile has struggled to gain traction in the Malaysian market thanks to its limited 3G network rollout and small retail presence.
U-Mobile’s 3G network covers only Kuala Lumpur and a few other key areas. It leases the 2G network of rival operator Celcom outside these 3G areas. However, the 2G roaming deal with Celcom is believed to be costly.
U-Mobile reportedly has just 4% of the mobile market.
For ST Telemedia, the deal would expand its Asian mobile presence beyond Singapore, Lao and Cambodia.
Asia Mobile Holdings, in which STT has a 75% stake in, owns about 49% of StarHub.