This article first appeared in The Edge Malaysia Weekly on October 13, 2025 - October 19, 2025

AXIATA Group Bhd (KL:AXIATA) has reactivated a plan to sell its majority stake in Edotco Group Sdn Bhd in a deal that could value the telecom tower infrastructure company at roughly US$2 billion (RM8.45 billion), sources say.

A source tells The Edge that non-binding bids are due soon and that JPMorgan is managing the sale. The investment bank did not immediately respond to an email seeking comment.

According to the source, a few “private equity and infrastructure funds” are said to be interested in Edotco. Interested foreign companies are likely to partner with local firms to bid as part of a consortium.

Axiata holds a 63% stake in Edotco, which operates and manages more than 47,000 towers across eight countries — Malaysia, Indonesia, Bangladesh, Cambodia, Sri Lanka, Pakistan, the Philippines and Laos.

Edotco’s other shareholders are Khazanah Nasional Bhd, which has a 31.71% stake — through wholly-owned subsidiaries Pulau Kendi Investments Ltd (21.14%) and Mount Bintang Ventures Sdn Bhd (10.57%) — and Retirement Fund Inc (KWAP), with 5.29%.

Khazanah is also Axiata’s biggest shareholder, with a 36.7% stake.

News of a potential sale of Edotco had been circulating in the market since late last year, with key owners Axiata and Khazanah reportedly undecided over whether to opt for an initial public offering or outright sale. “They’ve been flip-flopping between the two. Edotco’s presence in certain countries amplified the risk for an IPO,” says one source.

The Myanmar operation in particular was a problem following the 2021 state of emergency there, as some 28% of Edotco’s sites were within conflict zones; hence, it faced restricted access and operational difficulties. There was also the issue of foreign exchange volatility and currency controls. 

The renewed effort to pursue an outright sale of Edotco follows on the heels of the disposal of the Myanmar operation in mid-June. “It’s now a relatively cleaner entity and they are more motivated to sell,” says the earlier source.

On June 13, Axiata had completed the sale of the Myanmar tower operations to Hong Kong-based Zillion Tower Holdings Ltd for US$90 million cash, much lower than an earlier consideration of US$150 million, partly to ensure the certainty of a deal closure.

Kenanga Investment Bank Research, in a June 16 report following the sale, observes: “The removal of Myanmar exposure may … help revive investor interest in Axiata’s remaining assets — now free from associations with the military-led regime.”

Earlier in April, Innovation Network Corp of Japan sold its entire 21% stake in Edotco to Khazanah for an undisclosed sum, increasing the latter’s exposure to the tower firm.

As in previous times, Axiata acknowledges that it intends to explore the potential monetisation of Edotco.

“We previously informed investors of our intent to explore value illumination and potential monetisation of Edotco when appropriate. We will issue timely announcements in accordance with regulatory requirements as significant developments occur,” it says in an email response to The Edge.

Axiata points out that its 2025 portfolio road map strategically refocuses its assets into two clear pathways. Long-term strategic assets such as mobile companies CelcomDigi Bhd (KL:CDB), XLSMART, Robi, Dialog and Smart would drive operational excellence and market consolidation. Concurrently, “medium-term value illumination and monetisable assets, including Edotco, Link Net, Boost and ADA”, aim to attract new capital investments. (Link Net is an Indonesian broadband provider, Boost is a fintech platform and ADA is a digital analytics company.)

“Proceeds from these monetisations will be strategically dedicated to reducing holding company debt,” it adds. “Monetisation aligns our portfolio with our growth strategy, focusing resources on assets that create future value and yield for shareholders. We’ve successfully incubated these assets, including Edotco, to a credible scale. They possess strong future growth potential, which may necessitate external funding.”

Analysts have pointed out that a complete sale of Axiata’s 63% stake in Edotco could wipe out its entire financial leverage and strengthen its balance sheet significantly.

While Edotco is a substantial contributor to Axiata’s bottom line, it is also a material contributor to its gearing. ­“[Axiata’s] net debt to Ebitda (earnings before interest, taxes, depreciation and amortisation) stood at 2.8 times at end-2Q2025, down from three times at end-1Q2025 … Management did not provide further progress updates on the monetisation of the infrastructure assets, namely Linknet and Edotco, which is still expected possibly by 2026,” Maybank Investment Bank Research says in an Aug 29 report.

In the financial year ended Dec 31, 2024 (FY2024), the telecom tower infrastructure business accounted for almost 10% of Axiata’s external operating revenue of RM22.33 billion.

A search on CTOS shows that Edotco reported a profit after tax of RM410.76 million in the financial year ended Dec 31, 2024 compared to a loss after tax of RM175.5 million in the previous year. This was on the back of a 15.4% year-on-year improvement in revenue to RM2.86 billion, from RM2.47 billion.

As at Oct 10, Axiata’s shares had gained 3.61% this year to close at RM2.58 apiece, giving the company a market value of around RM23.7 billion. 

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