TM International shares down on possible fund raising proposal

SHARES of TM International Bhd (TMI) - which has investments in mobile operators in Malaysia, Singapore, India, Sri Lanka, Bangladesh, Indonesia and others - fell by 3.27 per cent on dilution concerns.

The company's main shareholder Khazanah Nasional Bhd said it may issue rights offer to repay debts to fixed-line operator Telekom Malaysia Bhd.

TMI Shares fell by as much as 4.9 per cent or 18 sen, it close 12 sen lower at RM3.54.

AmResearch said:

"TMI chairman Tan Sri Azman Mokhtar said TMI’s balance sheet deleveraging
exercise might involve a rights issue or equity-linked products..."

"This piece of news reinforces our view that earnings dilution exercises would be involved in order to de-leverage its balance sheet. Based on our estimates, an additional 200 million shares will lead to 5% earnings dilution."

Based on data compiled by Bloomberg, 8 of 22 research house placed a Buy call on TMI, another 8 recommended investors to hold on to the stocks, while the remaining 6 placed a SELL call.