KUALA LUMPUR (April 4): Axiata Group Bhd, Malaysia’s biggest wireless carrier by revenue, said on Thursday it is selling its Myanmar tower business for US$150 million, or about RM713 million, as it seeks to exit the Southeast Asian country.
In a filing on Thursday, Axiata said its 63%-owned subsidiary edotco Group Sdn Bhd is offloading its entire 87.5% stake in edotco Investments Singapore Pte Ltd, which is in turn a special purpose investment holding company for the group’s investments in Myanmar and sole shareholder of edotco Myanmar Ltd.
The group, however, did not disclose to whom it will sell its Myanmar business.
“The decision to exit Myanmar was made due to deteriorating macroeconomics and operating environments in Myanmar,” Axiata reiterated.
The group had previously shared that its plan to sell the Myanmar tower business was due to “worsening macroeconomic parameters and business conditions” in the country.
It said the divestment was also part of the group’s commitment to maintaining a strong balance sheet and shareholder value, which will be redeployed to reduce debt.
Axiata’s deposits, cash and bank balances amounted to RM4.61 billion, while its bank borrowings stood at about RM24.84 billion as at end-2023, according to its latest financial statement.
Meanwhile, its foreign currency borrowings and debt securities amounted to RM23.17 billion, of which the US dollar denomination stood at RM14.61 billion, Indonesian rupiah at RM5.10 billion, Bangladeshi taka at RM363.77 million, Sri Lankan rupee at RM925.16 million, the Philippine peso at RM2.13 billion and others at RM44.33 million.
It noted that the proposed divestment, which is scheduled to be completed within 12 months, is not expected to have any material effect on Axiata’s earnings for the financial year ending Dec 31, 2024 (FY2024).
Besides Myanmar, 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 to its Nepal-based mobile service unit Ncell Axiata Bhd.
Axiata, which completed an exercise to merge its local mobile Celcom Bhd with Digi.Com Bhd last year, still has interests in several emerging markets including Indonesia, India, Sri Lanka, Bangladesh, Cambodia, Pakistan, Laos and the Philippines.
For the full year of FY2023, the telco group recorded a net loss of RM2 billion versus a net profit of RM9.75 billion in FY2022. Meanwhile, its annual revenue grew 9.9% to RM22 billion, from RM20.02 billion in the previous year.
Shares in Axiata finished two sen or 0.76% lower to RM2.61 on Thursday, giving the group a market capitalisation of RM23.96 billion. The counter has gained 8.75% since the beginning of this year.
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