KUALA LUMPUR (June 20): Maxis Bhd (KL:MAXIS) and CelcomDigi Bhd (KL:CDB) announced on Thursday that they have fulfilled the conditions precedent for their subscription of a 14% stake each in state-owned 5G network Digital Nasional Bhd (DNB)

The two mobile network operators (MNOs) said in separate bourse filings that they are ready to complete the share subscription agreement (SSA) with the Minister of Finance (Incorporated) (MoF Inc) and DNB.

In its filing, Maxis said the group has also completed the subscription of 100,000 new shares in DNB at an issue price of RM1.

"The share subscription conditions precedent and shareholder advance conditions precedent have been fulfilled.

“With the fulfilment of the said condition precedent, the SSA becomes unconditional and parties to the SSA will now progress to the next stage of completing the proposed investment,” Maxis added.

In addition to Maxis and CelcomDigi, U Mobile Sdn Bhd and YTL Communications Sdn Bhd have also met the conditions precedent in the SSA, said DNB in a separate statement.

"With this crucial step completed, the SSAs are poised for completion by the end of June 2024 for all the MNOs, apart from Telekom Malaysia Bhd (KL:TM), to increase their equity stake in DNB. The long stop date for TM is Aug 21, 2024, for it to seek its shareholders’ approval, in accordance with its governance requirements," DNB added.

CelcomDigi, in announcing that it has met the conditions precedent in the SSA, said it is ready to commence the process to build Malaysia’s second 5G network.

"We will work closely with the government and the Malaysian Communications and Multimedia Commission (MCMC) on the dual network transition plan for the second 5G network towards a fair, transparent and consultative process," said CelcomDigi chief executive officer Datuk Idham Nawawi.

"We hope to have an outcome that equitably balances the economic and market impact and that not only benefits the government and industry but more importantly for Malaysian customers and businesses," said Idham.

He added: "With our modernised, state-of-the-art 5G-ready and the country’s largest 4G and 4G+ network, we believe we are in the best position to lead the development of the second 5G network for Malaysia, and to accelerate digital economic growth for the nation."

The government had announced the transition from the single wholesale network model for 5G to the dual network model in May last year.

In December, DNB inked SSAs with CelcomDigi, Maxis, Telekom Malaysia Bhd (KL:TM), U Mobile Sdn Bhd and YTL Communications Sdn Bhd for the five MNOs to subscribe a 14% stake each in DNB.

The government, through MOF Inc, is to retain the remaining 30% and hold a special share. MOF Inc may eventually exit DNB with only a special share.

Under the SSAs, the MNOs will each provide an RM233.23 million zero-interest loan to DNB, while each of them taking up a minimal 100,000 new shares for RM100,000.

Earlier this month, Communications Minister Fahmi Fadzil said the MNOs were given until June 21 to complete the SSA process for DNB equity acquisition. He said that after that date, the formal process of forming the second 5G network can begin.

Fahmi previously updated that as at April 30, 2024, the nation's 5G network coverage of populated areas had reached 81.5%.

Shares of Maxis closed down six sen or 1.7% at RM3.55 on Thursday, giving the group a market capitalisation of RM27.8 billion.

CelcomDigi settled one sen or 0.3% lower at RM3.71, valuing the the group at RM43.52 billion.

TM, meanwhile, finished three sen or 0.4% lower at RM6.70, bringing the group a market value of RM25.71 billion.