KUALA LUMPUR (Jan 17): Digi.Com Bhd's wholly-owned subsidiary Digi Telecommunications Sdn Bhd (DTSB) has entered into a settlement agreement with Telenor IT Asia Sdn Bhd (TITA) and Telenor Global Shared Services AS to terminate a memorandum of understanding (MoU) and service order for information technology (IT) infrastructure services.

"The settlement agreement will enable the parties to reach an amicable solution to resolve challenges on cost level, quality and commercial issues unfolded in current ongoing projects and subsequent running services executed under the MoU and service order, which were unforeseen at the time of entering into the MoU and service order," said Digi in its filing with the exchange.

It said the final settlement followed the parties' mutual agreement to terminate and exit the MoU and service order, and be discharged from their respective obligations.

Under the settlement agreement, the parties agreed on a total settlement sum of RM13.86 million to be paid by DTSB to TITA, which represents the price for the transfer of selected IT infrastructure, DTSB's contribution to the settlement and the relevant exit fee and termination charges.

The amount will be paid within 10 working days of the effective date.

The MoU and service order — inked on Nov 7, 2014 and Nov 25, 2016, respectively — were for a project to establish IT shared services centres in Asia, with TITA to render IT infrastructure services under the service order.

"The final settlement and termination of MoU and service order, as well as the asset transfer will not have a material financial impact for the financial year ended Dec 31, 2017, and financial year ending Dec 31, 2018, nor will it have any effect on the share capital and substantial shareholders' shareholdings of the company," said Digi.

Digi's share price rose 5 sen or 1.05% to close at RM4.82, giving a market capitalisation of RM37.48 billion.