KUALA LUMPUR: Axiata Group Bhd's subsidiary edotco Group Sdn Bhd is buying more than 13,000 telecommunications towers in Pakistan for US$940 million (about RM4 billion) to strengthen its position as one of the world's independent tower companies.
The acquisition from Pakistan Mobile Communications Ltd (PCML) is edotco's biggest expansion plan to date.
With its existing portfolio of over 26,000 towers owned and operated across six countries, the deal will effectively place edotco as the eighth largest independent tower company in the world and second largest multi-country tower operator globally.
Axiata president president and group chief excutive officer Tan Sri Jamaludin Ibrahim said the acquisition will further elevate edotco’s position as a leading independent tower company globally and bring strong financial accretion to the company.
“It will also help create a more balanced portfolio for edotco in having three operations of significant size and nature which are Malaysia, Bangladesh and Pakistan.
“I am very pleased with edotco’s growth in performance and footprint to date. This further drives our determination and focus towards making edotco a world-class business through operational efficiencies and scale,” he said at a briefing on the RM4 billion deal here today.
Jamaludin also said that there were no firm plans for a listing for edotco, as it has sufficient fund to grow its operation.
edotco chief executive officer Suresh Sidhu said Pakistan is one of the region’s fastest growing telecomunications infrastricture markets.
The country with over 200 million population has strong growth potentials as its mobile and data penetrations stand at around 73 per cent and 24 per cent respectively, Sidhu added.
The deal follows edotco’s recent successful acquisition of Tanzanite Tower Pte Ltd and its 700 towers in June.
“This reflects edotco’s continued expansion strategy as well as its investment commitment to Pakistan as a key growth market and confidence in the prospects of the country’s telecommunications infrastructure market,” edotco said in a statement.
The company said together with Pakistan-listed Dawood Hercules Corp Ltd (DH Corp), it is acquiring PMCL’s tower unit Deodar Private Ltd and its portfolio of over 13,000 tower assets via Tanzanite.
DH Corp, with a market capitalisation of US$600 million, is one of Pakistan's largest conglomerates. It has a varied business portfolio which includes fertilisers, foods, chemical storage and handling, trading and energy (independent power production, renewables and petrochemicals).
As part of the transaction partnership, DH Corp will be investing a 45 per cent stake in edotco Pakistan Pte Ltd, which in turn owns Tanzanite, with the remaining 55 per cent controlling stake to be held by edotco.
The US$940 million will be funded through a combination of external local debt of US$600 million and an equity split of US$174 million by edotco and US$166 million by DH Corp for their respective stakes.
The acquisition is scheduled to be completed by December.