Axiata said to seek buyers for US$700 mil of overseas holdings

KUALA LUMPUR (Sept 14): Axiata Group Bhd, Malaysia’s biggest mobile phone operator, is seeking to trim stakes in some of its overseas operations in deals that could raise as much as US$700 million (RM2.88 billion), says a Bloomberg report.

Quoting people familiar with the matter, the news agency said Axiata is seeking a buyer for about 11% of Indonesian unit PT XL Axiata, which has a market value of US$2.2 billion.

It is also selling up to 30% each of listed Sri Lanka unit Dialog Axiata Plc and Cambodian subsidiary Smart Axiata Co. Axiata’s total debt has risen 55% since end-2014 to RM21.5 billion as at end-June, data compiled by Bloomberg show.

Axiata, which has interests in 10 countries across Asia, will use part of the proceeds from the divestments to cut borrowings, said the news outfit, citing the same sources.

In response, Axiata said it is continuously reviewing various strategic options to enhance shareholders’ value. “Since the middle of last year, Axiata has been exploring options to further optimise its balance sheet and group structure, potentially including, but not limited to, the portfolio rebalancing and review of shareholding across subsidiaries.

“In the event any such transactions are entered into, Axiata will make all necessary disclosures at the appropriate time. Until such time, any such reports are speculative,” it said in a statement.

Axiata owns 83.3% of Dialog Axiata in Sri Lanka, 95.3% of Cambodian subsidiary Smart Axiata and 66.4% of its Indonesian unit PT XL Axiata. Axiata also has operations in Bangladesh and Pakistan, as well as minority stakes in Singapore firm M1 Ltd and India’s Idea Cellular Ltd. In April, Axiata acquired 80% of Nepal’s Ncell Pvt Ltd.

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This article first appeared in The Edge Financial Daily, on Sept 14, 2016. Subscribe to The Edge Financial Daily here.