Malaysia’s Axiata is looking to raise at least $500 million in an initial public offering of tower assets, according to a report from Bloomberg.
Citing sources familiar with the matter, Bloomberg says the company – which operates Malaysia’s biggest mobile network – is working with several financial institutions on the terms of the offering, which could take place next year in Kuala Lumpur.
As noted in the report, the offering would be the country’s first since that of Astro Malaysia Holdings, which raised $1.5 billion in October 2012, although energy company UMW Oil & Gas has said it plans to sell shares in an initial public offering in its fourth quarter.
Axiata (Kuala Lumpur, Malaysia) appears to be evaluating a takeover of Indonesian operator Axis, currently owned by Saudi Telecom (Riyadh, Saudi Arabia), but a merger between Axis and XL Axiata (Jakarta, Indonesia) – Axiata’s Indonesian subsidiary – has stoked competition concerns.
According to a report from Focus Malaysia in February, Axiata was planning to spin off tower assets it owns in seven countries into a single company with a valuation of up to MYR10 billion ($3.03 billion).
In its first-quarter report, Axiata said revenues grew by 5.5%, year on year, to MYR4.5 billion, but blamed a 2.4% dip in earnings before interest, tax, depreciation and amortization, to MYR1.8 billion, on the costs of expanding its data network.
In Indonesia, the operator said earnings were also hit by investments in data, as well as the change in the tower business model.
Last year, Axiata was reported to have called off a sale of 7,000 towers in Indonesia because of insufficient interest.
“It has been a tough start to the year but the Group delivered resilient results,” said Tan Sri Dato’ Azman Hj. Mokhtar, Axiata’s chairman, in the company’s earnings report.