KUALA LUMPUR (Oct 23): Astro Malaysia Holdings Bhd (KL:ASTRO) is proposing to dispose of its broadband business to Maxis Bhd (KL:MAXIS) for up to RM83 million in cash, as the group seeks to refocus resources on its core content, advertising and entertainment businesses.
According to Astro's bourse filing on Friday, the group expects a net gain of RM31.4 million from the proposed disposal by its wholly owned subsidiary Measat Broadcast Network Systems Sdn Bhd (MBNS) after taking into account derecognition of net assets. The proposed disposal will be to Maxis’s wholly owned unit Maxis Broadband Sdn Bhd under the conditional sale and purchase agreement signed on Friday.
Astro's broadband business was launched in 2022 as part of MBNS’ expansion beyond pay-TV into fixed broadband. It had 178,631 subscribers as at Feb 28, while the net book value of its assets stood at RM36.6 million as at Sept 30. The cost of investment in the broadband business assets was RM28 million.
The consideration is capped at RM83 million and will be adjusted according to the number of subscribers transferred to Maxis. Astro will receive RM83 million if at least 155,000 subscribers are transferred, with the consideration stepping down to RM82 million for 150,000 to 154,999 subscribers and RM80 million for 145,000 to 149,999 subscribers. If fewer than 145,000 subscribers are transferred, the consideration will be reduced by RM500 for each subscriber below that threshold.
Maxis said it will fund the acquisition through internally generated funds.
The acquisition is intended to accelerate Maxis Broadband’s expansion of its fibre subscriber base, broaden its customer reach, and provide opportunities to cross-sell and upsell its existing services, combining mobile and fixed connectivity for households.
Astro expects to utilise RM81.35 million of the disposal proceeds for working capital and general corporate purposes. These include funding the group’s operations, maintenance capital expenditure, general administration and other operating expenses. A further RM1.65 million has been set aside for expenses related to the disposal, including professional fees, extraordinary general meeting and administrative costs and regulatory fees.
The transaction, which is slated to be completed by the second quarter of 2027, is subject to Astro’s shareholder approval and a written notification from the Malaysian Communications and Multimedia Commission.
Related-party transaction
The proposed transaction is classified as a related-party transaction, given the interests of certain directors and major shareholders in both Maxis and Astro.
The directors of MBNS are Henry Tan Poh Hock, Grace Lee Hwee Ling and Lim Ghee Keong
Lim, who has a 0.02% stake in Astro, also sits on the boards of Maxis, Maxis Broadband and Astro Malaysia.
Non-independent and non executive Astro directors Mazita Mokty and Simon Cathcart are also nominee directors of Usaha Tegas Sdn Bhd (UTSB). UTSB is deemed to have an indirect interest in Maxis Broadband through its unit Usaha Tegas Equity Sdn Bhd.
Matthew James Turner, who is an alternative director to Lim, is the chief financial officer of UTSB.
Public Investment Bank Bhd has been appointed as independent adviser for Astro’s non-interested directors and shareholders on the proposed disposal.
Astro recorded a net loss of RM24.24 million in the six months ended July 31, 2026 (1HFY2027) against a net profit of RM29.87 million in 1HFY2026, as revenue declined 6.7% to RM1.29 billion from RM1.39 billion.
The group's borrowings stood at RM2.26 billion as at end-July, while cash and cash equivalents came in at RM149.1 million.
Astro's shares settled half a sen or 9.09% lower at five sen, for a market value of RM262 million. The stock has fallen 50% year-to-date.
Maxis’ share price closed up one sen or 0.28% to RM3.54, giving the group a market capitalisation of RM27.76 billion. The stock remained 7% lower since the start of this year.