KWAP invests US$100m in Axiata's tower unit, edotco

PETALING JAYA: Axiata Group Bhd has, through its private placement exercise, roped in Kumpulan Wang Persaraan (Diperbadankan) (KWAP) as an investor inits telecommunications tower subsidiary, edotco Group Sdn Bhd.
The telco said in a filing with the stock exchange that edotco had entered into an agreement with KWAP for the subscription of 136.63 million shares or 3.5% stake in edotco for US$100 million (RM440 million).
The inclusion of KWAP brings edotco’s maiden equity private placement to US$700 million, surpassing its initial announced placement size of US$600 million.
Axiata highlighted that the selection of KWAP was made based on the same process and valuation of the earlier private placements to Innovation Network Corp of Japan (INCJ) and Khazanah Nasional Bhd’s wholly-owned subsidiary Mount Bintang Sdn Bhd for US$400 million and US$200 million, respectively.
The deals, which were completed on Jan 27, were based on equity valuation of close to US$1.5 billion and an enterprise value to FY16 ebitda (earnings before interest, taxes, depreciation and amortisation) multiple of 12.5 times.
Following the private placement exercise, Axiata remains the largest shareholder of edotco with a 62.4% stake. JPMorgan is the sole placement agent in this transaction.
edotco is the 12th largest tower company globally with presence in Malaysia, Cambodia, Myanmar, Bangladesh, Sri Lanka and Pakistan. It is continually assessing opportunities in existing and new markets for growth and expansion.
The full proceeds from the placement process will allow edotco to undertake value accretive opportunities as they arise.
Meanwhile, KWAP CEO Datuk Wan Kamaruzaman Wan Ahmad said the pension fund has been very impressed by edotco’s rapid growth in the past five years.
“Domestic private equity has been an area of growth and on a trajectory to provide attractive investment income to the fund in recent years, and we would like to continue building our portfolio in this area. The target is to allocate 3% of our assets in private equity by 2020,” he said.
As of Dec 31, 2016, KWAP’s unaudited fund size stood at RM124.78 billion.