Malaysian Telco Axiata Becomes Latest Company to Exit Myanmar — Update
By Ying Xian Wong and Ben Otto
Malaysia's Axiata Group is exiting Myanmar after less than a decade, becoming the latest international player to quit the troubled Southeast Asian nation with the $150 million sale of its tower business there.
The telecommunications company, in which Malaysian sovereign wealth fund Khazanah Nasional holds a sizable stake, said late Thursday that one of its units would sell all of the towers the group owns in Myanmar, using the proceeds to pay down debt. According to the unit's website, the group owns more than 3,000 towers and managed sites in Myanmar.
Axiata said its decision to sell was due to "deteriorating macroeconomics and operating environments in Myanmar," without elaborating. It didn't disclose a buyer, but said it expects the sale to be completed within the next 12 months.
The sale marks the end of Axiata's foray into Myanmar, a country of about 55 million people whose political conflicts have frustrated attempts to shake off its relative isolation and draw more foreign investment to catch up to more developed neighbors like Thailand and Vietnam.
In the wake of a military coup in 2021, a host of international companies left the country, including U.S. oil giant Chevron, France's TotalEnergies, Norway's Telenor and Qatar's Ooredoo.
Axiata bought its first stake in the towers in Myanmar via its Edotco unit almost a decade ago, ultimately spending about $160 million in the acquisitions. The Malaysian company has been under pressure from its significant debt pile. At the end of 2023, it had more than 23 billion ringgit ($4.85 billion) in foreign debt, the majority denominated in U.S. dollars.
Maybank Investment Bank analyst Tan Chi Wei wrote in a research note that although the deal multiple looks "expectedly uncompelling," the transaction is a "necessary precursor" to broaden the tower unit's fundraising given that, amid sanctions, many international funds face limitations on investing in Myanmar.
Axiata previously flagged its intention to exit Myanmar when it posted quarterly earnings in February.
Write to Ben Otto at ben.otto@wsj.com
(END) Dow Jones Newswires
April 05, 2024 06:38 ET (10:38 GMT)
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