Shareholders in Malaysian telco Axiata have voted in favour of its planned acquisition of a majority stake in Nepal’s largest operator, Ncell, from TeliaSonera and Kazakh investment bank Visor Capital, which holds a 20% stake via SEA Telecom. In expansion mode, Axiata has also agreed a merger in Bangladesh and is reported to be working on one in Sri Lanka.
Shareholders in Malaysian telco Axiata (KLS:AXIATA) have voted in favour of its planned acquisition of a majority stake in Nepal’s largest operator, Ncell, from TeliaSonera (STO:TLSN) and Kazakh investment bank Visor Capital, which holds a 20% stake via SEA Telecom.
Axiata announced last December that it had agreed to acquire an 80% stake in Ncell, a deal which would expand its footprint across South Asia to 10 countries. The agreement will see TeliaSonera, which has been Ncell’s controlling shareholder since October 2008, receive US$1.03bn on a cash and debt-free basis for its 60.4% direct stake. In a separate but mutually conditional pact, the Swedish incumbent will dissolve its economic interests in the 20% locally-held ownership and receive US$48m from its local partner.
Axiata board chairman Azman Mokhtar said: “We are pleased to have obtained resounding support from our shareholders…in what the company sees as a significant and positive addition to our group portfolio,” adding that it reflects their confidence in the company’s regional growth strategy.
Jamaludin Ibrahim (pictured), president and CEO of the Kuala Lumpur-based telco, added that the acquisition of the stake at an attractive valuation in a growing market presents “a rare and an opportunistic expansion of its footprint in South Asia”.
The deal is expected to close by the end of H1 this year, subject to relevant approvals.
If and when consolidated, Ncell would be immediately accretive to Axiata’s financials. Based on Axiata’s FY2015 pro forma revenue, EBITDA and profit after taxation and minority interests, Ncell would provide an uplift of about 11%, 19% and 13% respectively, the company said.
Axiata stressed that the purchase of Ncell, which it said had some 12.8 million mobile subscribers as of July 2015, marks a “long-term strategic move” for the company and that it is committed to offering high-speed internet and products which will help with Nepal’s economic progress.
Axiata mandated JP Morgan as its international financial adviser for the deal and CIMB as its principal adviser.
The Malaysian telco agreed in late January to merge its Bangladesh unit Robi Axiata with Indian telco Bharti Airtel’s (NSE:BHARTIARTL) local unit Airtel Bangladesh. Axiata and Airtel are reportedly also in talks to merge their Sri Lankan units.
