Axiata reportedly eyeing $500m IPO for tower unit

Malaysian wireless carrier Axiata Group is looking to offload its tower unit Edotco through an initial public offering, according to reports.

Bloomberg cited unnamed sources who claimed Axiata has begun discussions with potential advisors over a domestic listing of the tower arm as soon as this year, and could potentially invites banks to formally pitch for the deal in Q1.

Edotco raised $700 million in a private placement last year from investors including sovereign fund Khazanah Nasional, Axiata’s top shareholder. The largest investor was Japan-backed fund Innovation Network Corporation, which bought a stake worth around $400 million.

Reports claim this latest move could raise a further $500 million for the company, which operates a portfolio of more than 26,000 towers across Southeast Asian countries including Malaysia, Myanmar, and Sri Lanka.

Axiata CEO Jamaludin Ibrahim has previously told Bloomberg in a 2016 interview that the company would look to expand infrastructure operations overseas ahead of a potential listing. This led to it agreeing a near-$1 billion deal with VEON to buy its tower assets in Pakistan.

Axiata has also been liked with a re-merger with Telekom Malaysia, which it split from in 2008 when known as TM International. It was rebranded as Axiata the following year. AmInvestment Research claims a re-merger would help reduce the difference in value between Axiata and its competitors at a time when the company has been struggling to gain momentum.

Through Edotco, it struck a deal with TM to provide infrastructure for the country's LTE operators. Under the collaboration, TM will provide its next generation backhaul services to connect mobile operators’ cell sites with their core network. TM and Edotco Malaysia will also explore opportunities to provide common infrastructure via smart centralised radio access network services.

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