KUALA LUMPUR, March 22 — The share price of Telekom Malaysia Bhd (TM) fell by 1.86 per cent at the close of Bursa Malaysia’s morning session on news of the lawsuit by the Malaysian Football League LLP (MFL) over the breach of a sponsorship contract.
At lunch break, TM’s shares shed six sen to RM3.16, with 1.47 million shares changing hands.
In a filing with Bursa Malaysia yesterday, TM said it had received a writ of summons and statement of claim from MFL seeking relief for the termination of an eight-year sponsorship deal worth RM480 million that was signed in February 2018.
“The claim is not expected to have any operational impact to TM Group. The financial impact, if any, cannot be ascertained at this juncture as it will depend on the outcome of the legal proceedings of the claim.
“We have instructed our solicitors to take the necessary steps to defend the claim,” it said.
It was previously reported that MFL was seeking a claim of RM428 million from TM, equated to the remaining contract value of the sponsorship.
In a research note today, Public Investment Bank Bhd said it maintained its “neutral” rating on TM, with a target price of RM3.60, as the research house saw downside risks to headline profit if the company failed to defend against the claim.
“We believe this could be a drag on TM’s share price performance in the near term as the legal proceeding could be a long drawn issue and settlement is not likely to be reached anytime soon,” it added. — Bernama