Bangladeshi mobile operator Robi Axiata may reportedly defer its IPO until as late as July 2016 because business circumstances are considered unfavourable.
A recent letter to the Bangladesh SEC signed by CFO Yap Wai Yip cited uncertainty over securing…
Bangladeshi mobile operator Robi Axiata may reportedly defer its IPO until as late as July 2016 because business circumstances are considered unfavourable.
A recent letter to the Bangladesh SEC signed by CFO Yap Wai Yip cited uncertainty over securing spectrum this year, tax issues and “insufficient incentive” as reasons why a listing at present is not advisable, the local Daily Star reported.
Robi, the third-largest of Bangladesh’s six mobile network operators, was cited as saying in the letter that it doubts it will be able to acquire additional spectrum in 2015.
A tax claim yet to be settled by the National Board of Revenue creates further uncertainty, the company, in which Malaysia’s Axiata Group has a 91.59% stake, reportedly added. Japan’s NTT Docomo owns the remaining 8.41% of shares.
In addition, Robi shareholders believe that even if circumstances improve, there is insufficient incentive to proceed with an IPO given the existing corporate income tax regime, the letter continued. It noted that mobile operators currently have the highest corporate tax rate in Bangladesh.
As such, Robi reportedly stated that it has written to the finance ministry, whose decision “would be paramount to our shareholders’ decision to offer shares to the public”.
While Bangladesh Telecommunication Regulatory Commission licensing guidelines require all six mobile operators to list on the local stock market, so far only the largest player, Grameenphone, has done so. Norway’s Telenor is Grameenphone’s largest sharehareholder.
Robi claimed to have 25 million subscribers at the end of September 2014, equal to a 21% market share.
Neither Robi nor Axiata was immediately available for comment.
