Telekom Malaysia (TM) should not face any problem in placing out the remaining 101.5 million of Axiata shares, given the quick speed at which the first placement of 90 million Axiata shares were taken up.

"The quick speed indicates that there is strong demand for Axiata shares," said ECM Libra in a research note today.

TM announced to Bursa Malaysia that it has completed the book- building exercise for 90 million of Axiata shares on Dec 2, 2010.

The 90 million Axiata shares have been placed to successful third-party institutional investors under private placement at a price of RM4.60 per Axiata share.

ECM Libra said its base case scenario assumes that TM would use the RM879.4 million proceeds from the sale of its entire stake in Axiata to repay US$260.3 million (RM820 million) of USD-denominated borrowings due to mature this month.

"This will help TM to save on RM65.6 million of interest expenses annually, therefore could revise upwards our financial year 2011 and financial year 2012 net profit by 10.3 per cent and 9.8 per cent, respectively," it said.

However, it does not discount the possibility that some or all of the proceeds could be returned to shareholders in the form of special dividends, the research house said.