News
Malaysian company further builds up its towers portfolio as Veon sheds more assets.
Malaysia’s Axiata on Wednesday announced that it has brokered a deal to acquire 13,000 telecoms towers from Pakistan Mobile Communications Ltd (PMCL), strengthening its position as a multi-national towers operator.
The telco has partnered with Pakistani investment conglomerate Dawood Hercules Corp on the deal.
Together the pair have agreed to pay US$940 million for Deodar, PMCL’s towers subsidiary. They will fund the deal through a combination of $600 million in external local debt and an equity split of $174 million from Axiata’s edotco business and $166 million by Dawood Hercules.
The firms’ Pakistani assets will be held by a subsidiary known as edotco PK. Axiata holds a 55% stake in the unit and Dawood Hercules the remaining 45%.
The deal is the company’s second towers acquisition in Pakistan in recent weeks. The firm completed the $88.9 million purchase of Tanzanite Tower Private Ltd (TTPL) earlier this month, a transaction that brought with it around 700 towers.
Axiata said it expects the PMCL deal to close in the fourth quarter, subject to receipt of regulatory approvals.
"With its strong business fundamentals and long-term potential, this acquisition marks a very significant expansion to edotco’s regional footprint and puts edotco firmly within the top 10 tower companies globally," said edotco chairman Datuk Azzat Kamaludin.
On completion of the deal, edotco will manage around 40,000 towers across Malaysia, Myanmar, Bangladesh, Cambodia, Sri Lanka and Pakistan, including 32,000 owned and operated sites.
"As the majority shareholder of edotco, Axiata strongly supports the proposed transaction which will further elevate its position as a leading independent tower company globally and bring strong financial accretion to the company," added Tan Sri Jamaludin Ibrahim, Axiata’s group CEO.
"It will also help create a more balanced portfolio for edotco in having three operations of significant size and nature which are Malaysia, Bangladesh and Pakistan," he said.
PMCL’s owners Veon, formerly VimpelCom, and Global Telecom Holding (GTH) also welcomed the deal.
"This transaction is highly value accretive for Veon and GTH and a further execution of Veon’s asset-light strategy," said Veon CEO Jean-Yves Charlier.
The proceeds of the sale will be used for general corporate purposes at PMCL, as well as paying for recently-acquired spectrum and debt repayments.
"It also reflects the start of a long-term partner ship with a strong counterparty with significant experience in tower management," Charlier added.
The deal includes an agreement under which edotco will provide tower services to PMCL, which operates in Pakistan as Jazz, for a 12-year period, renewable for three consecutive periods of five years each.
PMCL is Pakistan’s largest mobile network operator with 53 million customers.
With mobile penetration of around 73% and data penetration of 24% out of a population of 200 million-plus, Pakistan has strong growth potential, Axiata noted.
"In addition, its well-regulated telecommunications policies favour and promote infrastructure sharing making it an attractive investment for telecom infrastructure investors," it said.
