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Dialog shareholders approve Rs. 15.5 billion Rights Issue

Telekom Malaysia (TM) to inject Rs.13 billion in FDI:

DISCUSSION: Minister of Enterprise Development and Investment Promotion Dr. Sarath Amunugama held discussions with Chairman, Dialog Telekom Muhammad Radzi bin Haji Mansor and CEO, Dialog Telekom, Dr. Hans Wijayasuriya, on new investments in the telecommunication sector. Non-Executive Director, Dialog Telekom, Prahar Nagalingam Kirupalasingam, looks on.

RIGHTS ISSUE: Dialog Telekom Ltd. (DTL), announced that the shareholders of DTL, at its AGM held on May 21, 2007, approved the company’s landmark Rights Issue to a value of Rs. 15.5 billion.

The Dialog rights issue represents the single largest equity raising exercise to be executed on the Sri Lankan capital market.

Dialog’s principal shareholder Telekom Malaysia (TM) placing a strong vote of confidence in Sri Lanka and Dialog Telekom has pledged to enhance its direct investment in the country through subscribing in full for its entitlement under the rights issue.

“We have the utmost faith in the Sri Lankan market, the investment environment facilitated by the Government of Sri Lanka, and the enabling environment we have enjoyed under the aegis of the Telecommunications Regulatory Commission, the BoI and the Ministry of Media” said Yusof Annuar Bin Yaacob - Chief Executive Officer of TM International Sdn Bhd, commenting on Telekom Malaysia’s commitment to invest Rs. 13 Bn in DTL via the Rights Issue.

“We will continue to invest in Sri Lanka as we have done in the past with the objective of providing excellent and technologically advanced services to the Sri Lankan consumer” he added.

The rights issue will provide ordinary shareholders of the company with an entitlement to one ordinary share for every ten ordinary shares held, at a price of Rs. 21 per share.

The Dialog Telekom Rights Issue is expected to attract substantial interest from Dialog’s shareholders spanning foreign institutional, domestic institutional and domestic retail segments.

The proceeds of the Rights Issue and Preference Share Issue totalling around Rs. 20.54 Billion will partially finance the Dialog Group’s aggressive capital expenditure plans for the next three years targeting accelerated expansion of network capacity and coverage and transformational investments in convergent technologies spanning the multiple businesses lines of the group.

Dialog’s investments in Broadband, fixed wireless, and Media are expected to deliver the next phase of growth and supplement the already robust returns delivered to its shareholders, whilst contributing significantly to the communication infrastructure of Sri Lanka.

The performance of the DIAL share has been a key driver of the buoyancy and growth of the CSE and associated indices.

The DIAL share rose by approximately 117% during the 22 months following the company’s listing in July 2005.

Presently DIAL accounts for 22% of the market capitalization of the CSE.

The proposed financing exercise forms a part of a larger medium term funding programme, which would include further local and off-shore debt infusions aimed at maintaining an optimally geared capital structure.

The rights issue is supplemented by a Rated Cumulative Redeemable Preference Share Issue of up to Rs. 5 Bn.

The RCRPS are non-convertible and carry no voting rights. The 5 Billion RCRPS issued at Rs.1/- each will be placed with selected investors possessing the requisite scale, through a private placement.



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