UAE-based Etisalat has decided to reduce its stake in Indonesian mobile operator XL Axiata. The company confirmed that it has launched a sale process, but did not comment further.
XL Axiata is 66.6%-owned by Malaysia’s Axiata, while Etisalat controls…
UAE-based Etisalat has decided to reduce its stake in Indonesian mobile operator XL Axiata. The company confirmed that it has launched a sale process, but did not comment further.
XL Axiata is 66.6%-owned by Malaysia’s Axiata, while Etisalat controls a 13.3% stake. The remaining 20% is free float.
The company is offering 775 million XL Axiata shares in the Rp6,100-6,300 (US$0.64-0.66) price range, according to a Reuters report citing the term sheet, giving the stake a value of up to Rp4.88trn (US$510m).
The lower end of the range represents almost a 10% discount on XL’s closing price today (12 September).
Following the sale, the UAE operator will be left with approximately a 4% stake in the Indonesian operator. JP Morgan and Morgan Stanley are reportedly working on the transaction.
In March this year, it was rumoured that Etisalat was looking to sell its entire stake in XL Axiata for US$700m after failing to expand its partnership with Axiata.
But a few months later, the telco said it decided against selling XL for the time being because of the company’s good performance.
Over the last few months, Etisalat has been looking to restructure its assets, including merging, selling or outsourcing some of its operations, in an attempt to cut costs. It also said it may increase its stake in several subsidiaries in order to boost revenues.
The company reported a 23% drop in its net profit to AED5.8bn (US$1.6bn) in 2011 compared to 2010.
