Malaysian telecoms giant Axiata (MYX:6888) is close to converting a US dollar-denominated US$590m loan into local currency, its CFO Chari TVT told local reporters.
Malaysian telecoms giant Axiata (MYX:6888) is close to converting a US dollar-denominated US$590m loan into local currency, its CFO Chari TVT told local reporters.
Restructuring the debt is part of Axiata’s efforts to mitigate the negative effects of the weak ringgit, which has fallen 23% against the US dollar over the last 12 months, according to XE.com.
Chari was quoted by Reuters saying that Axiata was in the final stages of converting the loan into a ringgit-denominated partial sukuk. The process is reportedly being managed by CIMB.
The CFO’s disclosure followed the company’s Q2 results, which included a MR236m (US$57m) net foreign exchange loss over the last year. This was primarily due to the revaluation of its dollar-denominated debt and interest payments.
In its latest quarterly report, Axiata listed currency fluctuations as one of its four biggest risk factors, alongside intense competition, political risks, and regulatory challenges.
The company has net debt of MR9.03bn (US$2.19bn), of which MR6.24bn (US$1.52bn) is in US dollars.
Axiata is one of Asia’s largest telecoms companies, boasting 260 million customers across its subsidiaries in Malaysia, Indonesia, Sri Lanka, Cambodia, Bangladesh, India, Singapore and Pakistan.