Indonesian telco ups stake in SCICOM

KUALA LUMPUR: PT Telekomunikasi Indonesia International is believed to have upped its interest in Scicom (MSC) Bhd to 29.3%, making it the largest shareholder in the business process outsourcing (BPO) outfit.
Yesterday, a total of 30 million shares in four blocks and representing about 11.2% of the company’s total share base were crossed off market for RM18.9 million, or an average of 63 sen a share. Scicom closed at 51.5 sen, slipping half a sen.

As of early last month, Jakarta-based Telekomunikasi Indonesia had an 18.1% stake comprising about 50 million shares in Scicom, and was understood to have been looking at raising its shareholding in Scicom for sometime now.

It is learnt that the sellers of the shares were Scicom executive director Leo Ariyanayakam and non-independent non-executive director Krishnan Menon, but the proportion of the shares they each sold is not known.

According to the company’s latest annual report, Menon’s vehicle Netinsat Asia Sdn Bhd had 16.14%, or 42.82 million shares in Scicom, while another 5.65% or 15 million shares were in his own name.

Filings with Bursa Malaysia showed that as at end-May 2010, Ariyanayakam had a 15.41% stake or 41.3 million shares in Scicom. Other substantial shareholders are pilgrim fund Lembaga Tabung Haji which had about 7.57% or 20.08 million shares.

Telekomunikasi Indonesia emerged as a substantial shareholder in Scicom in January 2008 with a 5.06% equity interest.

It is the arm overseeing and managing the overseas business of PT Telekomunikasi Indonesia Tbk, a government-controlled telco, which has its mainstay in international and overseas telecommunications business and which is listed in Jakarta and New York.

Interestingly, Telekomunikasi lndonesia has no board representation on Scicom, despite being a substantial shareholder. Given the latest acquisition, it is not clear if this will change or if the company will seek to control Scicom and set its direction.

Telekomunikasi Indonesia’s raising its stake may stem from its interest in Scicom’s core business in BPO pertaining to the handling of call centres for its clients.

Scicom’s major clients include AirAsia Bhd, whereby the two companies have a joint venture called Asian Contact Centers Sdn Bhd, and Singapore Telecommunications.

For its nine months ended March 31, 2010, Scicom’s net profit rose 35% to RM6.43 million from RM4.78 million a year earlier while revenue fell 15.5% to RM90.55 million from RM107.2 million. Basic earnings per share share improved to 2.42 sen from 1.8 sen a year earlier.


Written by Jose Barrock
This article appeared in The Edge Financial Daily, June 16, 2010.