Friday 12 Apr 2024
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KUALA LUMPUR (Feb 22): edotco Group Sdn Bhd, a 63%-owned subsidiary of Axiata Group Bhd, is seeking a buyer for its telecommunication tower business in Myanmar.

After Nepal, Myanmar will be the next market that Axiata intends to exit, in view of the worsening macroeconomic parameters and business conditions there, said Axiata in its quarterly results announcement on Thursday.

Axiata pointed out that the group has commenced an active programme to seek buyers to exit Myanmar.

However, the group did not reveal details of the divestment plan, whether the telco is selling its effective stake in edotco’s Myanmar operation or that edotco is disposing of its operation there. 

“Tough, decisive actions were taken to exit the deteriorating operating environments of Nepal and Myanmar in the financial year of 2023 (FY2023). 

These decisions allow management to focus on assets that can create future value for shareholders,” Axiata chairman Tan Sri Shahril Ridza Ridzuan said in a statement accompanying its latest financial results.

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, its 2022 annual report showed.

“edotco continues to record strong topline growth, reaping the benefits from its inorganic ventures in Philippines and Indonesia; however, profitability was impacted by assets and goodwill impairments of Myanmar and Pakistan,” said Axiata.

Axiata, which completed an exercise to merge its local mobile Celcom Bhd with Digi dotCom Bhd last year, has its footprint in a number of emerging markets, including Indonesia, India, Sri Lanka, Bangladesh, Cambodia, Pakistan, Laos and the Philippines.

Nonetheless, its regional investments have yet to yield the returns as expected after more than a decade, coupled with high capital requirements. Consequently, this adds pressure on Axiata’s working capital and cash flow.

Axiata had in December last year exited Nepal at a loss after seven years, due to the prolonged regulatory challenges and uncertainties related to the outstanding capital gains tax (CGT) to its Nepal-based mobile service unit Ncell Axiata Bhd.

Edited ByKathy Fong & Surin Murugiah
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