Axiata and edotco Sign Definitive Agreements on Record Maiden Equity Private Placement Deal of USD600 Million
Kuala Lumpur, 18 January 2017 – Axiata Group Berhad (“Axiata”) and its wholly-owned subsidiary, edotco Group Sdn. Bhd. (“edotco” or “Company”) today announced the signing of the definitive agreements of its record Equity Private Placement Deal of USD600 million with Innovation Network Corporation of Japan (“INCJ”, USD400 million committed) and Khazanah Nasional Berhad (“Khazanah”, USD200 million committed) for primary and secondary edotco shares, respectively.
As the largest 2016 placement exercise in the tower sector announced on 13 December 20161, the transaction is expected to close by end January 2017. Based on edotco’s portfolio at close2, the maximum committed placement of USD400 million from INCJ and USD200 million from Khazanah would result in the new investors collectively owning 34.1% of edotco, with Axiata remaining the majority shareholder at 65.9%.
This Private Placement, as concluded by the investors, values edotco’s final portfolio at equity value of close to USD1.5bn and an enterprise value to FY2016 EBITDA multiple of 12.5x3, which is comparable to regional peers. The final portfolio takes into account the potential injection of tower assets in Cambodia and Sri Lanka at a later date with a resultant increase in Axiata’s shareholding in edotco. The valuation was arrived based on a competitive process which included several other international and domestic parties.
Suresh Sidhu, CEO of edotco said, “Our lead investors and new shareholders, INCJ and Khazanah, are both long-term investors who will provide strategic value-add to edotco’s growth strategy, open doors to further strategic collaborations, as well as enhance and diversify our shareholder base. We will deploy the proceeds of the primary placement with the aim of accelerating our growth trajectory, thereby growing shareholder value further”.
edotco Chairman, Datuk Azzat Kamaludin stated, “edotco’s strong business fundamentals, exceptional long-term prospects and experienced management team have all played a role in attracting high quality foreign and local investors such as INCJ and Khazanah.”
Tan Sri Jamaludin Ibrahim, President & Group CEO of Axiata added, “Significant portfolio expansion as well as strong improvements in tenancies have led to robust business growth and as a result, edotco has been able to achieve a comparatively strong valuation in this placement exercise. We are determined to make edotco a world-class business and one of the world’s largest independent tower companies by 2020. The successful placement exercise is yet another step - financially and symbolically - towards facilitating this aspiration.”
J.P. Morgan is the Sole Placement Agent in this transaction.
1 Based on Standard & Poors’ Capital IQ data for 2016 as of 9 January 2017
2 Representing edotco’s current portfolio of 100% in edotco Malaysia, 87.5% in edotco Myanmar and 80% in edotco Bangladesh
3 Based on unaudited full year financials
About Axiata Group Berhad
As one of the largest Asian telecommunication companies, Axiata today operates in ten countries, servicing almost 300 million subscribers. With a diverse portfolio in mobile network operations, communications infrastructure services and digital services, the Group pieces together the best in connectivity, technology and people in its vision of Advancing Asia.
Axiata has controlling stakes in market leading mobile operators in South East Asia and South Asia. Axiata Group of companies operate under the brand name of ‘Celcom’ in Malaysia, ‘XL’ in Indonesia, ‘Dialog’ in Sri Lanka, ‘Robi’ in Bangladesh, ‘Smart’ in Cambodia and 'Ncell' in Nepal. Further to this, the Group also holds strategic interests in ‘Idea’ in India and ‘M1’ in Singapore.
‘edotco’, the Group’s infrastructure company, operates in six countries to deliver telecommunications infrastructure services, amassing a portfolio of over 16,000 towers and 12,000 km of fibre. It aims to be one of the top regional tower companies and is committed to responsible and sustainable business operations.
Axiata Digital (AD), its digital services arm, captures the rapid growth in internet-based businesses through its portfolio of 24 digital brands, servicing growing demands in mobile money, mobile adverting, e-commerce, entertainment and education.
As a committed and long-term investor, Axiata provides employment to 25,000 people within its operations. In line with its sustainability goals, the Group actively supports and drives young talent development; disaster response and recovery; as well as green initiatives.