UAE-based Etisalat is considering divesting its 13.3% stake in Indonesian mobile operator XL Axiata for up to US$700m, according to a Reuters report citing sources.
The decision to exit the Indonesian operator comes after Etisalat reportedly failed…
UAE-based Etisalat is considering divesting its 13.3% stake in Indonesian mobile operator XL Axiata for up to US$700m, according to a Reuters report citing sources.
The decision to exit the Indonesian operator comes after Etisalat reportedly failed to expand its partnership with Axiata Investments, the Malaysian telco group which owns a 66.6% stake in XL Axiata.
The sale could happen this year.
JP Morgan and Morgan Stanley are expected to act as financial advisers to Etisalat, the report said.
This is the second time this year that Etisalat is linked to an asset sale. In early February, it confirmed that it was looking at either selling its African telecom towers or entering an infrastructure sharing agreement with another telco.
It was reported, at the time, that a sale of its 4,500 towers could allow Etisalat to raise approximately US$600m.
Shortly after, Etisalat reportedly said it was considering restructuring and outsourcing some of its operations in an attempt to cut costs after the company reported a 23% drop in its net profit to AED5.8bn (US$1.6bn) in 2011 compared to 2010.
The company blamed the impairment charge on its Indian joint venture Etisalat DB – which had its 2G licences revoked following the Supreme Court’s verdict on India’s 2G scandal – for this decline.
Since then, the UAE operator has said it would shut down its Indian operations by 31 March.
