Malaysian parent looking to trim ownership in Dialog Axiata: report

Axiata Group Bhd., Malaysia’s biggest mobile-phone operator, is seeking to trim stakes in some of its overseas operations, including Sri Lanka, Bloomberg reported. The wire service, quoting unnamed sources said the Kuala Lumpur-based company is selling as much as 30 percent each of listed Sri Lanka unit Dialog Axiata PLC and closely held Cambodian subsidiary Smart Axiata Co. The firm is also seeking a buyer for about 11 percent of the Indonesian unit PT XL Axiata, which has a market value of US $ 2.2 billion.

The trimming of its overseas operations is expected to raise as much as US $ 700 million for Axiata Group Bhd. Total debt at Axiata has risen 55 percent since the end of 2014 to reach 21.5 billion ringgit (US $ 5.2 billion) at the end of June, according to the data compiled by Bloomberg. Axiata, which has interests in 10 countries across Asia, will use part of the proceeds from the divestments to cut borrowings, the people familiar with the matter had told Bloomberg. Axiata Group Bhd., through Axiata Investments (Labuan) Limited, owns 83.3 percent of Dialog Axiata PLC in Sri Lanka and 95.3 percent of Cambodian subsidiary Smart Axiata. It also owns 66.4 percent of its Indonesian unit XL Axiata, whose shares have fallen 26 percent this year. Axiata also has operations in Bangladesh and Pakistan, as well as minority stakes in Singapore telecommunications firm M1 Ltd and Indian wireless carrier Idea Cellular Ltd. In April, Axiata completed the US $ 1.4 billion acquisition of an 80 percent stake in Nepal’s Ncell Pvt. In reference to the Bloomberg news, Axiata Group Bhd. said it continuously reviews various strategic options to enhance the shareholders’ value. “In this regard, since the middle of last year, Axiata has been exploring options to further optimise its balance sheet and group structure, potentially including, but not limited to, the portfolio rebalancing and review of shareholding across subsidiaries. In the event any such transactions are entered into, Axiata will make all necessary disclosures at the appropriate time. Until such time, any such reports are speculative,” Axiata Group Bhd. noted.