DiGi announces second capital repayment
Delivering another RM450 million capital repayment to shareholders
SHAH ALAM, 5 April 2006 - DiGi today announced a second round of capital repayment (proposed 2nd capital repayment) to its shareholders after it first announced its 1st round of capital repayment on 26 October 2005. DiGi is delivering on its promise to return excess cash to shareholders as part of its ongoing capital management initiatives.
The company is proposing a further capital repayment of RM0.60 per ordinary share which will be carried out via a reduction in its share capital and share premium account in order to return RM450 million to its entitled shareholders.
Morten Lundal, DiGi's Chief Executive Officer says, "The decision to proceed with the proposed 2nd capital repayment exercise was taken in cognisance of DiGi's healthy balance sheet and its strong cash flow generating ability which is more than sufficient to fund ongoing investment programmes including investment in broadband access technologies. DiGi will explore these options to the fullest in order to deliver on its commitment to be the most exciting mobile broadband provider in Malaysia."
On 26 October 2005, DiGi announced both a long-term recurring dividend policy and its 1st capital repayment exercise.
DiGi's long-term recurring dividend policy involves a minimum pay-out ratio of 50% of net earnings beginning financial year 2006 whilst its 1st capital repayment was designed to return RM0.75 for every ordinary share of RM1.00 each in DiGi which translates to a capital repayment of RM562.5 million cash.
The 1st capital repayment had obtained the shareholders' approval at an Extraordinary General Meeting convened on 24 January 2006. The said exercise is currently pending the order of the High Court of Malaya and is expected to be completed by the second quarter of 2006.
In undertaking these two capital repayments, DiGi will be paying out more than RM1.0bn to its shareholders within the span of one year. In short, DiGi shareholders will be reaping dividend yields in excess of 15% during this period based on yesterday's closing share price.
According to Lundal, with these capital repayment initiatives, DiGi will be one of the very few companies listed on Bursa Malaysia Securities Berhad that is delivering such premium returns to shareholders.
Lundal added that, "DIGi's financial position will remain robust notwithstanding the quantum of dividends to be paid out in the coming months."
Corporate Communications Department
DiGi Telecommunications Sdn Bhd
Lot 10, Jalan Delima 1/1
Subang Hi-Tech Industrial Park
40000 Shah Alam, Selangor Darul Ehsan