DiGi's business trust on track

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KUALA LUMPUR (Mar 4): DiGi.Com Bhd said today that its plan to set up a business trust to increase the telecommunications giant's capital efficiency and return excess cash to shareholders remains "on track".

DiGi first announced its plan to set up a business trust in April 2013, but not much has been said about it since.

DiGi's outgoing chief executive officer Lars Ake Norling said: "We have not encountered any major problems with it. It is just that it takes time to get all the questions answered - not just from our side but also from the stakeholders."

He added that Digi (fundamental: 1.55; valuation: 2.1) is still engaging stakeholders and regulators on setting up the business trust.

A business trust is a trust that runs and operates a business enterprise. Registered business trusts must have a trustee-manager, whose role is to safeguard the interests of beneficiaries or unit-holders of the trust and to manage the business of the trust.

It is still a relatively new framework in Malaysia and Norling had previously said back in 2013 that because of the newness of the framework, DiGi needed time to fully understand the implications of setting up the trust, and the benefits as well as the limitations that would come with it.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)