Axiata to divest stake in Idea Cellular

KUALA LUMPUR: Axiata Group Bhd will exit its loss-making India-based associate company, Idea Cellular, because of Idea’s impending merger with Vodafone India.

Axiata president and group chief executive officer Tan Sri Jamaludin Ibrahim said the merger between Idea and Vodafone India would not only create India’s biggest telecommunications company (telco) but also one of the world’s biggest telcos.

“Frankly, we are excited with this merger as all synergies are in place. However, once that happens, our shareholding will be reduced to less than 10 per cent. This will stop us from being a strategic partner to Idea... I must stress that Axiata is not a financial investment company,” he said at the group’s 2017 financial year announcement, here, yesterday.

Axiata owns 18.1 per cent of Idea.

When asked how much Axiata would gain from its divestment, Jamaludin said it should be more than RM1 billion.

“There is really no way to tell right now as it also depends on when we actually dispose of the stake and the market forces at that point. We envision it to be somewhere north of RM1 billion.”

It was reported that Idea and Vodafone India were expected to close their deal next month or in April.

On the possible merger between Axiata and Telekom Malaysia Bhd, Jamaludin said: “The reason why Axiata and Telekom were demerged still stands. We can collaborate with each other without the need of merging again.”

Axiata has also allocated RM150 billion for its digital push this year. It posted a 76.9 per cent jump in profit-after-tax to RM1.2 billion in the 2017 financial year, compared with RM657 million the previous year.

It also declared a full-year dividend of 8.5 sen per share.