Telekom Malaysia Berhad Proposes Share Buy-Back of Up to 5% of Issued Shares

Kuala Lumpur, 4 May 2026 – Telekom Malaysia Berhad (“TM” or “the Company”) has issued a comprehensive statement to shareholders outlining its intention to seek approval for a significant corporate exercise: the proposed authority to purchase up to 5% of its own ordinary shares. This initiative, known as the “Proposed Share Buy-Back,” will be tabled for consideration at an Extraordinary General Meeting (EGM) scheduled for Tuesday, 19 May 2026, at 12:30 p.m., to be held in a hybrid format both physically at Menara TM and virtually via the Boardroom Smart Investor Portal (BSIP).

Key Points of the Proposed Share Buy-Back

• Quantum: TM is seeking approval to buy back up to 5% of its total issued shares, which, as of the latest practicable date (LPD, 6 April 2026), equates to 191,886,924 shares out of the total 3,837,738,480 issued shares.
• Duration: The authority, once approved, will remain valid until the conclusion of TM’s next AGM, the expiration of the legally required period to hold the next AGM, or until it is revoked or varied by another shareholders’ resolution—whichever occurs first.
• Funding: The buy-back will be financed via TM’s retained profits and/or borrowings. As per the latest audited financials (FYE 31 Dec 2025), TM holds RM5.27 billion in retained profits. Any use of borrowings will be carefully assessed to ensure no material impact on the Company’s cash flows.
• Pricing: Purchases can only be made at prices not exceeding 15% above the 5-day volume-weighted average market price (VWAMP) immediately preceding the buy-back. Resale of treasury shares must not be less than the 5-day VWAMP, except for a discount (not exceeding 5%) if the resale is at least 30 days after purchase and at a price not less than the purchase cost.
• Treatment of Purchased Shares: As per the Companies Act 2016, the Board may cancel the shares, retain them as treasury shares, resell, distribute as share dividends, transfer for employee share schemes, or use them for other prescribed purposes.
• Public Shareholding Spread: TM assures the buy-back will not result in the public shareholding falling below the required 25%. After a full buy-back, spread would reduce from 52.39% to 49.88% (assuming all shares are bought from public shareholders).

Rationale and Potential Advantages for Shareholders

• Potential for EPS Enhancement: By reducing the number of shares in circulation, TM’s earnings per share (EPS) could increase, potentially leading to a positive re-rating of the stock.
• Efficient Capital Management: Utilisation of surplus cash or borrowings for share buy-back may be more value-accretive than other uses, especially during periods of undervaluation.
• Flexibility: Treasury shares may be resold at higher prices, distributed as share dividends, or used for employee incentive schemes.
• Signal of Confidence: The move may signal management’s confidence in the underlying value of TM’s shares.

Potential Disadvantages and Risks

• Reduced Financial Flexibility: The buy-back may reduce TM’s cash resources, possibly limiting the ability to pursue new investments or affecting dividend capacity.
• Interest Income Opportunity Cost: Funds used for the buy-back could otherwise earn interest or be invested in other projects.
• Not Obligatory: Even with approval, the Board retains full discretion on if, when, and how much to purchase.

Effects on Shareholders and Share Price

• Shareholding Structure: Proportional shareholding of major and substantial shareholders (including Khazanah, EPF, and KWAP) will increase if TM purchases shares from the public and cancels them.
• Financial Metrics:
  • If shares are cancelled, issued share capital will decrease, enhancing per-share ratios (EPS, NA per share).
  • If shares are kept as treasury shares, voting and dividend rights are suspended; these shares can be resold or distributed later.
• Dividends: If shares are cancelled, dividends per share could rise due to a reduced denominator. Treasury shares may also be distributed as share dividends.
• Mandatory Takeover Code Implications: The Board will ensure the buy-back does not trigger any mandatory takeover obligations for major shareholders.

Important Information for Shareholders

• EGM Details: The EGM will be held in hybrid mode on 19 May 2026, 12:30 p.m. at Menara TM and via the Boardroom Smart Investor Portal.
• Voting and Proxy: All shareholders may attend physically or virtually and vote by poll. Proxies must be lodged by Monday, 18 May 2026, 12:30 p.m.
• Record Date: Only shareholders on record as at 12 May 2026 are entitled to vote.
• Full Details Available: The full Statement, Notice of EGM, Proxy Form, and Administrative Guide are available at TM’s Investor Relations portal.
• Directors’ Recommendation: The Board, after careful consideration, recommends shareholders vote in favour of the Proposed Share Buy-Back, stating it is in the best interests of the Company.
• Share Price History: TM’s shares traded between RM6.19 and RM8.30 in the 12 months leading up to March 2026, with the last traded price at RM7.20.

Potential Price-Sensitive Implications

• Share Price Support: Share buy-backs generally provide downside support to share prices and can lead to a re-rating if the market believes the shares are undervalued.
• EPS Accretion: Successful execution of the buy-back, especially if done at attractive valuations, can boost EPS and return on equity metrics, potentially attracting further investor interest.
• Signal to Market: The Board’s willingness to deploy capital for buy-backs may be viewed as a positive signal regarding management’s view of the Company’s intrinsic value.
• Liquidity Considerations: A reduction in free float (if shares are cancelled) may affect trading liquidity, though the Company has indicated it will not breach the minimum public spread requirement.

Conclusion

Investors and shareholders of Telekom Malaysia Berhad should pay close attention to the upcoming EGM and the resolution on the Proposed Share Buy-Back. If fully implemented, the buy-back may have a material impact on the Company’s capital structure, financial ratios, and potentially its market valuation. Shareholders are advised to review the full details and consider participating in the EGM, either physically or virtually, to exercise their voting rights.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold shares of Telekom Malaysia Berhad or any other security. Investors should review the official documents and consult their financial advisors before making any investment decisions.

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