Axiata to dispose of Myanmar tower business for RM713mil

 

Axiata’s subsidiary Edotco owns and manages a portfolio of 54,000 towers across nine markets in Asia. (EDOTCO website pic)

PETALING JAYA: Telecommunications group Axiata Group Bhd will dispose of its entire stake in its subsidiary Edotco Myanmar Ltd for US$150 million (RM713.03 million), signalling its exit from the telecommunications tower business in Myanmar.

In a filing with Bursa Malaysia today, Axiata said Edotco Investments (Labuan) Ltd, a wholly owned subsidiary of Edotco Group Sdn Bhd, which is a 63% subsidiary of Axiata, entered into a share purchase agreement (SPA) for the disposal of its entire 87.5% stake in Edotco Investments Singapore Pte Ltd.

The latter is a special purpose investment holding company for Edotco Group’s investments in Myanmar and sole shareholder of Edotco Myanmar Ltd.

Axiata, which did not disclose the identity of the buyer, said the decision to exit the Myanmar market was due to “deteriorating macroeconomics and the operating environment in the country”.

The telco said the board is of the opinion that the proposed divestment is in the best interests of Axiata.

“Capital from the proposed divestment in Myanmar, aligned with Axiata’s commitment to maintaining a strong balance sheet and enhancing shareholder value, will be re-deployed to reduce debt,” it said.

The proposed divestment is subject to regulatory approvals and expected to be completed within 12 months from the date of the SPA.

It is not expected to have any material effect on Axiata’s consolidated net assets (NA), NA per share, gearing and consolidated earnings for the financial year ending 31 December 2024.

This is the second market that Axiata is exiting in the past six months. In December last year, it exited Nepal at a loss after seven years, due to prolonged regulatory challenges and uncertainties related to its Nepal-based mobile service unit Ncell Axiata.

As of last year, Edotco owns and manages a portfolio of 54,000 towers across nine markets: Malaysia, Indonesia, Bangladesh, Pakistan, Sri Lanka, Myanmar, Laos, Cambodia and the Philippines.

Axiata completed an exercise to merge its local mobile unit Celcom Bhd with Digi dotCom Bhd last year. For FY2023, the telco posted a net loss of RM2 billion versus a net profit of RM9.75 billion in FY2022.

Its shares closed 2 sen or 0.76% lower at RM2.61, valuing the group at RM23.96 billion. - FMT