This article first appeared in The Edge Malaysia Weekly on December 1, 2025 - December 7, 2025

AXIATA Group Bhd (KL:AXIATA) is understood to have narrowed down the bidders for its telecommunications tower infrastructure outfit Edotco Group Sdn Bhd to three, sources familiar with the matter tell The Edge.

The shortlisted bidders are understood to be Macquarie Group; a consortium comprising Employees Provident Fund (EPF), Retirement Fund Inc (KWAP) and I Squared Capital; and a consortium involving private equity firm CVC Capital Partners plc, a fund under the purview of KWAP and a Chinese player.

“From quite a number of bidders, Axiata has narrowed the potential buyers down to three. I hear it will be reduced to two by year end, then the winner will be announced soon after,” says a source.

Another source familiar with Edotco and the bidders says there is a requirement that at least 51% of the company should remain in Malaysian hands. This suggests that Macquarie may be on the lookout for a local partner, although the details of whom it is in talks with are scarce.

Axiata has been weighing two options: hiving off its 63% stake in Edotco or pursuing an initial public offering.

In an emailed response to The Edge about a month ago on the potential stake sale, Axiata said: “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.

“Proceeds from these monetisations will be strategically dedicated to reducing holding company debt ... 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.”

Axiata’s stake in Edotco could be valued at roughly US$2 billion or RM8.31 billion, The Edge reported in October, quoting sources.

The second-largest shareholder is sovereign wealth fund Khazanah Nasional Bhd, with a 31.71% stake held via wholly-owned subsidiaries Pulau Kendi Investments Ltd (21.14%) and Mount Bintang Ventures Sdn Bhd (10.57%). KWAP holds the remaining 5.29% of the telecom tower operator.

Khazanah is also Axiata’s largest shareholder, with 36.7% equity interest, while EPF owns 18.89%. KWAP held slightly less than 3% of the telco at end-March.

Edotco operates telecom towers in Bangladesh, Cambodia, Indonesia, Malaysia, Pakistan, the Philippines and Sri Lanka. It is learnt that some of the bidders are hesitant to take on Edotco’s assets in Bangladesh and Pakistan, but talks on how this issue can be resolved are ongoing.

Edotco sold its Myanmar ventures to Hong Kong-based Zillion Tower Holdings Ltd for US$90 million in June. Last month, the telecom tower operator disposed of its Laos business to OCK Group Bhd (KL:OCK) at an undisclosed price. Prior to the sale of the Laotian assets, Edotco had 33,904 towers, with more than 57,000 tenancies.

Whether the Bangladesh and Pakistan assets will be carved out and sold by Edotco, or if the bidders will acquire them before undertaking a subsequent sale, remains to be seen.

In a recent positive development, Edotco was awarded Sri Lanka’s first Telecommunications Infrastructure Services Licence in September by the country’s Telecommunications Regulatory Commission. This licence authorises the company to provide a comprehensive suite of infrastructure services essential for national connectivity, spanning both passive and active infrastructure solutions (such as tower and pole structures, fibre, indoor network solutions and small cells), which could boost earnings.

For the financial year ended Dec 31, 2024, Edotco chalked up an after-tax profit of RM410.76 million on the back of RM2.86 billion in revenue. It had total assets of RM12.15 billion and total liabilities of RM9.01 billion. It also had retained earnings of RM97.3 million while its share premium and reserves stood at -RM1.62 billion.

For the nine months ended Sept 30, Axiata made a net profit of RM403.3 million from revenue of RM8.78 billion, while Edotco recorded an after-tax profit of RM314.81 million from RM1.78 billion in revenue.

Axiata had deposits, cash and bank balances of RM3.68 billion at end-September. It also had RM10.91 billion in long-term borrowings and RM4.85 billion in short-term debt commitments. Its reserves stood at RM6.85 billion.

Axiata’s share price, which hit a 52-week high of RM2.79 in intra-day trading on Nov 20, had since tapered off to close at RM2.41 last Friday, giving the company a market capitalisation of RM22.14 billion. The stock has gained nearly 50% since its 52-week low of RM1.63 in early March.

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