IFN Asia Forum 2011 * 17 th -19 th October 2011: Celcom Sukuk Case-Study

1. IFN Asia Forum 2011 * 17th-19th October 2011: Celcom Sukuk Case-Study Roslinda Ahmad Director/Head, PDS, Wholesale Banking Group Islamic Banking Division Chari TVT Chief Financial Officer Celcom Axiata Berhad

2. Executive Summary • Celcom’smassive and unique RM4.2 billion Al IjarahSukuk clinched the “Ijarah Deal of the Year” and the “Merger and Acquisitions Deal of the Year” awards at the Islamic Finance News (IFN) Awards 2010. • Celcom Transmission (M) SdnBhd (“CTX”), the Issuer (“Issuer”) is a wholly-owned subsidiary of Celcom AxiataBerhad (“Celcom”), which in turn is a wholly-owned subsidiary of Axiata Group Berhad. • CTX’s principal activities is to provide network transmission related services. • CTX had issued Islamic medium term notes (“Sukuk”) of RM4.2 billion in nominal value under a Sukuk programme (“Sukuk Programme”) to part finance CTX’s acquisition of Celcom’s telecommunication network business, under an internal restructuring exercise of the Celcom group. • The Islamic principle applied under the Sukuk Programme is Ijarah (Head-lease and Sub-lease) using the network facilities acquired by CTX as the underlying assets. • The Head-lease and Sub-lease Ijarah structure was used instead of the more common Sale and Leaseback Ijarah mainly due to restrictions on the ownership of network facilities under the telecommunication regulations.

3. Celcom Restructuring – key highlights • Enables Celcom to establish CTX as a platform for a separate infrastructure service provider : well-positioned to drive efficiencies, enhance cost savings and create value through the strategic development of its network operations. • Creation of a potential regional hub in line with Axiata’s regional strategy to enhance the Group’s network operations : CTX may also act as an infrastructure specialist for the entire Axiata Group and expands outside of the Group. • Examples of Celcom’s group determination of achieving cost savings through reduction of duplication include: • Infrastructure and strategic collaborations with other industry players namely, Digi and TM; • Network transformation via Single RAN platform Other benefits: • Lesser foreign exchange drain. • Enhanced local skill development through specialised & quality training and development. • Better employment opportunities inside and outside of Malaysia. • Increased in skilled and expertise will provide avenue for increase in average wages/salaries for local experts.

4. SUKUK HOLDERS Ijarah Structure • Ijarah involves leasing ofleaseable assets such as terminal buildings, property, plant, equipment etc. over a specified period for a specific price (lease payments). Ijarah is suitable for companies such as plantation,manufacturing or property with substantial amount of leaseable assets, including land, plant and equipment. Steps Step 1 SPV (on behalf of sukukholders) and Asset Owner (AO) shall execute a Purchase Agreement, under which SPV shall purchase certain Shariah compliant leasable assets (“the Assets”) from AO at a Purchase Price (PP). Step 1a To purchase the Assets, SPV shall issue Sukuk to Investors, which represent Investors’ proportionate and undivided beneficial ownership in the Assets (entitling the Investors to receive the Ijarah payments and all other payments in relation to the Assets). Proceeds from the Sukuk issue shall be utilised to pay the PP to AO. 1a Issue Sukuk 2 Periodic Distributions 1a Proceeds SPV Step 2 SPV and Obligor shall execute an Ijarah Agreement on the Assets, under which SPV shall lease the Assets to Obligor for a specified period in return for specified Ijarah payments. Obligor shall pay lease rentals to the SPV, which shall be distributed to the Investors in the form of one-off/periodic distributions. 1 PP 1 Purchase Assets 3 Purchase Assets 2 Lease Rentals 2 Lease Assets Asset Owner/Obligor Step 3 Obligor shall grant a Purchase Undertaking to SPV in respect of the Assets, wherein Obligor undertakes to purchase the Assets from SPV at the Exercise Price, upon the occurrence of certain termination events including the maturity of the Sukuk. Note: The Proposed Sukuk can be structured with or without an SPV. 4

5. 1 1 3 CTX’s Islamic Structure: Ijarah - Head-lease and Sub-lease 1a 4 Issue Sukuk Purchase Undertaking Ijarah Sub-lease Agreement 2 Ijarah Head Lease Agreement CTX (Issuer) Subscribers Trustee (acting on behalf of the Subscribers One-off Rental equivalent to issue price (PP) Sukuk Proceeds (e.g.RM1,000 million) Periodic Distribution Amounts Rental Payments 3 (e.g.RM1,000 million x 5% x5 = RM125 million)

6. CTX’s Islamic Structure: Ijarah Head-lease and Sub-lease (cont’)

7. CTX’s Islamic Structure: Ijarah Head-lease and Sub-lease (cont)

8. Q & A

9. Extensive Experience in the Ringgit Islamic Capital Markets RM3.1 billion RM20.0 billion RM820.0 million RM4.2 billion Malaysia Airports Capital Berhad Celcom Transmission (M) Sdn Bhd PengurusanAset Air Berhad via Pengurusan Air SPV Berhad KonsortiumLebuhraya Utara-Timur (KL) SdnBhd Islamic CP Programme and Islamic MTN Programme Sukuk Programme Government Guaranteed SukukProgramme Islamic Medium Term Notes Programme Joint Lead Manager and Joint Bookrunner Joint Lead Arranger /Joint Lead Manager and Joint Bookrunner Joint Lead Arranger and Joint Lead Manager Lead Arranger & Lead Manager 2011 2010 2010 2010 RM2.5 billion RM10.0 billion RM550.0 million RM1.0 billion Khazanah Nasional Berhad via Danga Capital Berhad Bank Pembangunan Malaysia Berhad Tadamun Services Berhad Maju Expressway Sdn Bhd Government Guaranteed Islamic and Conventional MTNs Multi-Currency Islamic Securities Programme Islamic Medium Term Notes Programme Trust Certificate Issuance Programme Principal Adviser, Lead Arranger & Lead Manager Joint Lead Manager and Joint Bookrunner Joint Lead Arranger, Joint Lead Manager and Joint Bookrunner Joint Lead Manager and Joint Bookrunner 2010 2010 2009 2009 RM2.2 billion RM4.5 billion RM20.0 billion RM4.0 billion Syarikat Prasarana Negara Berhad Pernerbangan Malaysia Berhad PengurusanAset Air Berhad via Pengurusan Air SPV Berhad Sime Darby Berhad Government Guaranteed Islamic MTN Programme Islamic MTN/CP Programmes Government Guaranteed Islamic MTN Programme Islamic CP and MTN Programme Joint Lead Arranger, Joint Lead Manager and Joint Bookrunner Joint Lead Arranger, Joint Lead Manager, Joint Bookrunner Lead Arranger, Lead Manager and Bookrunner Joint Lead Manager and Joint Bookrunner 2009 2009 2009 2009 9

10. Contact Details London New York Tokyo Hong Kong Bahrain Yangon Bangkok Kuala Lumpur Labuan Brunei Darussalam Singapore Jakarta Please direct all queries to: Chari TVT Chief Financial Officer Celcom Axiata Berhad Roslinda Ahmad Head, Product Distribution & Strategy Group Islamic Banking Division Level 34, Menara Bumiputra-Commerce 11, Jalan Raja Laut, 50350 Kuala Lumpur, Malaysia. Tel: +603 2619 1645, Fax: +603 2619 3657, Email: roslinda.ahmad@cimb.com Website: www.cimbislamic.com

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