Axiata unit acquires control of Digicel Myanmar Tower

PETALING JAYA: Axiata Group Bhd’s unit, edotco Group Sdn Bhd, is buying a 75% stake in Digicel Asian Holdings Pte Ltd based on an enterprise value of US$221 million (RM974.61 million) on a cash free and debt-free basis.
Tower company, edotco, entered into a conditional share purchase agreement last Friday with Digicel Group Ltd (Digicel) to acquire the controlling stake in Digicel Myanmar Tower Co Ltd (MTC) via Digicel Asian.
“The transaction values MTC at an enterprise value of US$221 million, in line with market benchmarks for similar assets. The deal is subject to relevant regulatory approvals,” it told the stock exchange last Friday.
The transaction will be settled via cash after adjusting for external borrowing and other working capital requirements, based on the expected closing date of Nov 30, is expected to be about US$125 million.
Axiata said the acquisition will provide edotco a strategic majority control and a platform in a highly attractive tower industry within edotco’s geographic area of focus.
The purchase will also further solidify edotco as the premier infra provider to the greater Southeast Asian telecom industry as well as expand edotco’s footprint beyond that of Axiata Group’s existing operations.
Axiata said the Myanmar tower market is expected to be one of Southeast Asia’s largest and fastest growing telecommunication infrastructure service markets.
edotco CEO Suresh Sidhu said the acquisition is a unique and exciting opportunity for the company to establish a leading platform in the largely untapped Myanmar market.
“The Myanmar telecommunications industry with its low mobile penetration, favourable regulatory conditions and high reliance on tower and infrastructure sharing presents significant potential for the edotco business as it expands into the new market,” he said.
edotco believes Myanmar to be a critical part of its long-term strategy and expects to invest further into the country.
It plans to bring innovative products and end-to-end managed services that it offers in the Asian region, from towers and transmission to operations and maintenance and, potentially, energy into Myanmar.
Commenting on the deal, Axiata president and CEO Datuk Seri Jamaludin Ibrahim said this was very much in line with Axiata’s long-term strategy to create new revenue streams apart from the core mobile business.
He added that the acquisition will enhance Axiata’s tower infrastructure business significantly in a market outside the group’s existing footprint.