Malaysian telecom conglomerate Axiata Group last week announced it will dispose of its entire holding in Edotco Myanmar Ltd for $150 million, Reuters reported. The transaction represents Axiata’s exit from the cell tower business in Myanmar.
The company said Edotco Investments (Labuan) Ltd, a wholly owned subsidiary of its tower operating unit, Edotco Group, agreed to sell its entire 87.5 percent stake in Edotco Investments Singapore Pte Ltd, the sole shareholder of Edotco Myanmar. Axiata did not disclose the identity of the buyer.
Headquartered in Kuala Lumpur, Edotco Group operates and manages a regional portfolio of over 58,000 towers across nine countries in South and Southeast Asia including Malaysia, Indonesia, Bangladesh, Cambodia, Sri Lanka, Pakistan, Philippines, Laos, and Myanmar. That portfolio and market coverage makes Edotco the largest tower company in the region, according to Inside Towers Intelligence.
Edotco Myanmar has a portfolio of over 3,000 towers and managed sites. The company offers built-to-suit and co-location services to support mobile network operators in Myanmar with efficient infrastructure assets.
Edotco Group acquired Edotco Myanmar over 2015 and 2016, during the high-growth phase of the Myanmar tower business. The company says that when it entered the market, the operating environment was very favorable to the tower business, which included free flow of capital, a greater ability to remit funds, lesser operational disruption, and less volatile foreign exchange movement against the U.S. dollar.
A military coup in February 2021, however, plunged Myanmar into a political and humanitarian crisis, with widespread violence also disrupting the economy. “The decision to exit Myanmar was made due to deteriorating macroeconomics and operating environments in Myanmar,” Axiata said.
The company indicated the capital from the sale of its Myanmar operations will be used to pay down debt, in line with its commitment to maintaining a strong balance sheet and enhancing shareholder value. In a statement, Axiata said that this transaction represents a strategic realignment of its portfolio and allows it to focus on markets with the greatest potential for growth.
Khazanah Nasional Berhad, a sovereign wealth fund controlled by the Malaysian government, is Axiata’s largest shareholder with a 37 percent stake.
By John Celentano, Inside Towers Business Editor
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