KWAP takes $100m stake in Axiata’s edotco
19 April 2017 | Jason McGee-Abe
Axiata and its subsidiary, edotco, have announced that the second largest pension fund in Malaysia, Kumpulan Wang Persaraan (KWAP), has taken a $100 million stake in the telecoms infrastructure services unit.
edotco is currently the 12th largest tower company globally and operates and manages more than 25,000 telecom towers across Malaysia, Cambodia, Myanmar, Bangladesh, Sri Lanka and Pakistan.
The additional $100 million upsize of its 2016 record tower sector equity private placement sees KWAP join the fold of investors. The full proceeds from the placement process will allow edotco to undertake value accretive opportunities as they arise.
“The upsize of $100 million and the structure of the offering marks another achievement in our maiden private placement exercise,” said Suresh Sidhu, CEO of edotco. “edotco now has the advantage of funding flexibility as well as the balance sheet capacity to continue to grow the business confidently and capitalise on potential acquisition opportunities.”
The enlarged placement of shares to KWAP is an extension of edotco’s equity private placement process announced in late December 2016 and was concluded on the same equity valuation of close to $1.5 billion and an enterprise value to FY2016 EBITDA multiple of 12.5x, which is comparable to regional peers.
Tan Sri Jamaludin Ibrahim, president and group chief executive officer of Axiata, added: “It is an honour for us to welcome KWAP as a new shareholder to edotco. As an existing long- standing investor in Axiata, KWAP’s take up of this placement not only validates our long-term growth strategy but also of edotco’s strong business fundamentals, its exceptional long-term prospects and experienced management team. We thank KWAP for placing their trust in both Axiata and edotco.”
Commenting on the investment, Dato’ Wan Kamaruzaman bin Wan Ahmad, CEO of KWAP, said: “We have been very impressed by edotco’s rapid growth in the past five years, and would like to be part of its growth journey, towards becoming one of the leading tower players globally by 2020. Domestic private equity has been an area of growth and on a trajectory to provide attractive investment income to the fund in recent years, and we would like to continue building our portfolio in this area. The target is to allocate 3% of our assets in private equity by 2020.”
At completion, edotco’s shareholding results in the investors collectively owning 37.6% of edotco, with Axiata remaining as the majority shareholder at 62.4%.
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