KUALA LUMPUR: Axiata Group Bhd yesterday announced that it will exit Myanmar by selling its entire stake in EDOTCO Investments Singapore Pte. Ltd., for US$150 million or RM713 million.
Axiata's subsidiary edotco Investments (Labuan) Ltd, owns the 87.5 per cent stake in EDOTCO Investments, which acts as an investment holding company for EDOTCO's operations in Myanmar and is the sole shareholder of Edotco Myanmar Limited.
According to a Bursa Malaysia filing yesterday, the decision to exit the Myanmar market was due to deteriorating macroeconomics and operating environments in Myanmar.
The sale is for a total cash consideration of US$150 million is subject to customary closing adjustments.
Axiata which has come under fire recently for its losses in Nepal said, the board of birectors of Axiata, after having considered all aspects, is of the opinion that the proposed divestment in Myanmar is in the best interests of Axiata.
Axiata announced its plans to exit the Myanmar operations in its fourth quarter ended Dec 31, 2023 financial results annuncement on Feb 22, 2024.
It recognised a RM887.9 million impairment of assets (including goodwill) of in the quarter and financial year 2023.
"Capital from the proposed divestment, Myanmar, is aligned with Axiata's commitment to maintaining a strong balance sheet and enhancing shareholder value, will be re-deployed to reduce debt," it said.
The telecommunication company said the potential sale of assets in Myanmar is contingent upon regulatory approvals and is anticipated to be finalised within 12 months from the signing of the Share Purchase Agreement (SPA).
"It is projected that this divestment will not significantly impact Axiata's consolidated net assets, net assets per share, gearing, or consolidated earnings for the fiscal year ending on Dec 31, 2024," it continued.
Khazanah Nasional Bhd owns a 36.73 per cent interest in Axiata, while the Employees Provident Fund owns a 18.09 per cent interest.
Axiata last traded at RM2.61 a share, giving it a market capitsalisation of almost RM24 billion.
