PETALING JAYA – Retirement Fund Inc (KWAP) is the latest investor in edotco Group Sdn Bhd after it paid US$100mil for a 5.4% stake in the company that owns telecommunications towers in Asia.
The private placement of shares to the pension fund followed the year-end share placement to both Khazanah Nasional Bhd and Innovation Network Corp of Japan (INCJ) which raised US$600mil for edotco. With the latest placement, edotco has raised US$700mil.
Khazanah and INCJ hold a 10.7% and 21.5% stake respectively in edotco, while Axiata Group Bhd holds the remaining 62.4%.
edotco said that the enlarged placement of shares to KWAP was an extension of its equity private placement process announced in December 2016, and was concluded on the same equity valuation of close to US$1.5bil and an enterprise value to financial year 2016 earnings before interest, tax, depreciation and amortisation multiple of 12.5 times, which is comparable to its regional peers.
edotco is the 12th largest tower company in the world with more than 17,000 towers. Apart from Malaysia, the towers are located in Cambodia, Myanmar, Bangladesh, Sri Lanka and Pakistan.
Part of the US$700mil, or about US$200mil, will go towards paring down Axiata’s debts of RM22.3bil, while the rest will be used for edotco’s expansion.
Recent reports from India suggested that edotco could be eyeing the tower assets of Idea Cellular and Vodafone, which are merging to create India’s biggest mobile company. Axiata has some stake in Idea, but with the merger, its stake will be diluted to about 10%.
edotco CEO Suresh Sidhu said the upsize of US$100mil and the structure of the offering marked another achievement in its maiden private placement exercise.
“edotco 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,” he added.
Market analysts believe that this private placement of shares is also to pave the way for an eventual listing of edotco, although the promoters have said there is no real urgency at this juncture. Market analysts, however, are predicting a listing next year.