(AFP) Norwegian telecoms group Telenor announced today a bid to raise its stake in Malaysian mobile telecommunications operator DiGi from 32.9 percent to 61 percent for RM1.3 billion.

Telenor said it had informed Malaysian mobile telephone operator DiGi's board of its plan to grab 61 percent of the firm, the maximum allowed to foreign companies under domestic law.

The offer was approved by the Malaysian Securities Commission yesterday, it said.

"We are very pleased to announce our intentions of increasing our investment in DiGi," Telenor Mobile Communications chief executive Arve Johansen said in a statement.

"We made our initial investment in December 1999 and have come to learn the market and the company as very promising," he added.

"There is an exciting growth potential in the Malaysian market. We expect DiGi to continue to create value for its shareholders and we hope to contribute to the value creation by leveraging our comprehensive expertise from mobile operations throughout Europe and Asia."

Telenor now holds 247 million ordinary shares in DiGi, or about 32.9 percent of the company, through its wholly owned subsidiary Telenor Asia.

Partial takeover

Under the voluntary, partial takeover offer, Telenor planned to take a maximum 210.5 million shares, or 61 percent.

The part tender offer was conditional on Telenor ending up with at least 375,000,001 DiGi shares, representing more than 50 percent, at the completion of the offer.

If Telenor ended up with a holding of 50 percent plus one share, the operation would cost about RM843 million. The cost would rise to RM1.3 billion if the final stake was 61 percent.

Telenor said it intended to maintain the public listing status of DiGi on the Kuala Lumpur Stock Exchange.

"Telenor is seeking to increase its long-term interest in the Malaysian mobile market through the partial tender offer for DiGi shares," the statement said.

DiGi is a full-service mobile telecommunications operator in Malaysia, with more than one million mobile subscribers on its GSM1800 network by the end of March 2001, it added.

"Telenor intends to develop the company's business further and strengthen DiGi's market position."

The offer was subject to approvals from authorities in Malaysia and from DiGi's shareholders.

Salomon Smith Barney and Arab-Malaysian Merchant Bank were acting as financial advisors to Telenor.

In 2000, Telenor had revenues of RM16.3 billion in 2000 while DiGi had revenues of RM653 million dollars.