Axiata, edotco in deal with Khazanah, Japanese firm to raise US$600m

PETALING JAYA: Axiata Group Bhd and its wholly-owned subsidiary edotco Group Sdn Bhd announced a US$600 million (about RM2.65 billion) primary and secondary equity private placement deal yesterday.
In a filing with Bursa Malaysia yesterday, Axiata said it has, together with edotco, entered into a binding term sheet with Innovation Network Corp of Japan (INCJ) and Khazanah Nasional Bhd for a proposed private placement and divestment, respectively.
The binding term sheet signed with INCJ is to raise up to US$400 million (about RM1.77 billion) in a private placement to INCJ.
Meanwhile, the binding term sheet with Khazanah is for Axiata’s divestment of edotco shares to Khazanah for US$200 million (about RM885 million).
“The maiden equity-raising exercise for edotco sets a new benchmark as the largest global tower sector private placement in 2016. The deal saw strong demand for edotco shares with interest from a diverse mix of investors comprising both international and local asset management companies, financial institutions and strategic investors,” the group said in a statement.
The actual price and number of edotco shares to be issued and/or divested under the proposals have not been determined. Definitive agreements in relation to the proposals are expected to be finalised and signed next month.
Upon completion of the proposals, the enlarged capital base of edotco is expected to strengthen its financial position. Axiata will remain the majority shareholder of edotco post-transaction.
The proceeds from the exercise will be primarily used to finance mergers and acquisitions and in-country organic growth as well as other general corporate, investment and working capital purposes.
“We are extremely pleased to receive such strong support and interest from an impressive pool of investors. We see a perfect fit with our new shareholders, INCJ and Khazanah. The additional capital injection will provide edotco the capacity to execute its growth strategies including expansion within Asia via key acquisitions and further in-country organic opportunities,” edotco CEO Suresh Sidhu said.
Axiata president and group CEO Tan Sri Jamaludin Ibrahim said edotco has become an important source of growth and a potential dividend-yielding company for the group in the medium term, and the secondary shares of US$200 million will help Axiata reduce its debt.
Since its establishment in 2012 as the first and only regional tower company in Asia, edotco has grown its tower base to over 25,000 operated and managed towers in five key Asian countries.
JPMorgan is the sole placement agent for edotco for the proposals, which are separate and are not interconditional.