Axiata's Asia dream fades as rivals bid for overseas units

Axiata's Asia dream fades as rivals bid for overseas units

By: 
Bloomberg
03/10/18, 07:12 am

(Oct 2): Axiata Group Bhd’s dream of building a carrier that spans southern Asia from Singapore to Pakistan, Indonesia and India is fading as it risks losing hold of overseas units to rivals.

Malaysia’s biggest wireless carrier received an offer from Singapore Press Holdings and Keppel Corp to buy out its stake in M1, the latest in a series of challenges to its regional presence.

The view was rosier for Axiata in 2016, when Chief Executive Officer Jamaludin Ibrahim signalled interest in raising its stake in M1. He also planned to double the number of telecommunication towers in South and Southeast Asia in three years and eventually offer the assets in a public offering. Since then, its stake in Idea Cellular was diluted by half after the Indian carrier merged with Vodafone Group Plc, and its plan to buy Veon’s tower unit in Pakistan was called off.

M1 remains a “strategic asset” for Axiata, and the Malaysian carrier will continue to review all available options, with the sole objective of upholding shareholders’ value, the company’s spokesman said in response to Bloomberg. It has presence in 11 countries now, compared to 10 a decade ago, and has expanded to tower infrastructure and the digital business.

“We are much more of a regional player today compared to when we first started, and we will continue to pursue our expansion in areas that enable us to grow and enhance shareholders’ value,” the spokesman said.

Fully Repaid
Higher competition and regulatory hurdles are the key reasons for its overseas troubles, Shafiq Kadir, analyst at KAF-Seagroatt & Campbell Bhd said by phone. “They will have to seek other acquisitions or expansion, and increase focus at home and in Indonesia, to make up for this,” he said.

Axiata still has operations in Indonesia, Bangladesh, Sri Lanka, Nepal and Cambodia. The Malaysian carrier paid $260.8 million for an early 12.1% stake in M1 in 2005 at $2.20 per share. It would gain $547 million if it accepts SPH-Keppel’s offer of $2.06 as M1’s dividends over the years have fully repaid the debt and equity used to buy its current 28.68% stake, according to Bloomberg calculations.

Analysts at Daiwa Capital Markets Singapore and Citigroup Global Markets Inc said Axiata can counter SPH-Keppel’s buyout offer if it chooses to.

“We think it is unlikely it would agree to the offer,” Ramakrishna Maruvada, analyst at Daiwa Capital Markets Singapore, wrote in note on Thursday. “On the strength of its balance sheet alone it has adequate resources to engage in a bidding war up to $2.50.”

Next stop: The interchange of public and private good

SINGAPORE (May 20): Two-minute intervals between trains. Fewer breakdowns. Clean, new buses running at a higher frequency. Bright LED screens displaying details of stops on both buses and trains. To many commuters who are enjoying these benefits, the meltdown of Singapore’s transport system in December 2011, and again in July 2015, is a distant memory. Certainly, services have improved significantly. There are new trains and buses, while existing ones have been spiffed up. There has been an overhaul of the older rail systems, presumably including fixing the grips for the electricity rail ....
Read More >>
Moving from compliance to accountability

While the collection, use and disclosure of data is regulated by the Personal Data Protection Act, b

Failed Innopac deal portends mining magnate Gutnick’s woes in Australia

SINGAPORE (May 20): The Australian Securities and Investments Commission (ASIC) is seeking judicial permission to wind down mining company Merlin Diamonds. The regulator is also probing into whether its chairman Joseph Gutnick failed in his duties. Gutnick, who is known as “Diamond Joe”, is under investigation for a A$13 million ($12.3 million) loan made by Merlin to AXIS Consultants, a private company linked to him. Merlin shares have been suspended from trading since October 2018. ASIC is seeking an order to appoint Deloitte to liquidate Merlin, owner of the Merlin Diamond Mine Pro....
Read More >>