In late 1994, Malaysia opened up the mobile-phone business to new entrants. Analysts say TRI has been outmaneuvered by rival Maxis, which has 800,000 customers yet makes more money than TRI by catering to higher-paying customers. It has better after-sales service and better infrastructure in place. TRI's efforts to build an expensive, countrywide network while fighting for market share has landed it in a cash-flow bind. The bonds are convertible into stock.
Most investors opt to swap convertible bonds for equity when share prices are rising.
But TRI put the conversion strike price at 11.80 ringgit. The company won't say how it intends to raise the rest. But the German phone company has already lost three-fourths of its original investment. Telekom officials deny a takeover of TRI is imminent. Kuala Lumpur bankers claim Chase Manhattan is arranging a bridge loan to pay off the bonds and buy some time.