KUALA LUMPUR: Axiata Group, Malaysia’s biggest telecom operator by revenue, said its infrastructure unit is buying an additional 12.5% stake in a telecom tower company in Myanmar for $35 million.
The deal, which involves purchase of 250,000 shares under a put and call option agreement with YSH Finance, will raise edotco Group’s stake in edotco Myanmar to 87.5% once completed, Axiata said in an exchange filing. edotco Myanmar was formerly known as Digicel Myanmar Tower Company.
edotco will be offered “a right of first offer” if YSH Finance decides to sell the remaining option shares equivalent to 12.5% stake in edotco Myanmar, Axiata added.
Axiata bought 75% stake in Digicel Asian Holdings, which owns Digicel Myanmar Tower Company Limited, for $125 million in cash through edotco Group last year. A put and call option agreement was signed as part of the sale.
Digicel Asian Holdings was a joint venture between Bermuda-headquartered Digicel Group and YSH Finance, a subsidiary of Burmese conglomerate Yoma Strategic Holdings.
Analysts said the latest deal dovetails with edotco Group’s regional expansion strategy in Myanmar, a nation of 51 million people emerging from sanctions and decades of rigid military rule as one of the Southeast Asia’s fastest growing economies.
“Tower assets yield long term recurring income and are shielded from any market competition,” said Hong Leong Investment Bank’s analyst Tan J Young, noting that the deal is positive for Axiata Group.
edotco Group, formed in 2012 after Axiata decided to unlock value of its tower and infrastructure assets, currently manages over 14,000 telecommunications towers across Malaysia, Bangladesh, Cambodia, Sri Lanka and Pakistan.
As part of its investments into one of world’s last frontier markets, edotco Group has also earmarked investments of up to $200 million over the next eight years to add telecommunication towers in Myanmar.
edotco Group is seeking to own as much as 5,000 towers in Myanmar within the next eight years, its chief executive Suresh Sidhu had said in December. The company also plans to introduce a host of services that it already offers in other Asian markets.
