Axiata’s scrapped US$940 mln Pakistan deal lauded
Our rating on Axiata is based on a debt-to-earnings before interest, tax, depreciation, and amortisation ratio of less than two-times on a sustained basis. S&P
SINGAPORE: Axiata Group Bhd’s (Axiata) financial headroom would improve with the cancellation of its acquisition of a Pakistani telecom tower company, according to S&P Global Ratings yesterday.
The ratings on Malaysiabased Axiata (BBB+/Stable/-) are unaffected, it said in a statement.
Axiata’s 62.4 per cent-owned subsidiary, edotco Group Sdn Bhd, was to acquire Deodar, the tower unit of Pakistan Mobile Communications Ltd.
S&P said it now projects Axiata’s ratio of debt to earnings before interest, tax, depreciation and amortisation (EBITDA) at 1.7 to 1.8-folds in 2019, better than the 1.9 to twofolds it had expected with the transaction.
“Our rating on Axiata is based on a debt-to-earnings before interest, tax, depreciation, and amortisation ratio of less than two-times on a sustained basis,” it said.
Deodar was to add more than 13,000 towers to edotco’s portfolio for US$940 million.
The acquisition was to be funded by US$600 million of debt and the remainder by equity.
“Despite the cancellation of the transaction, we believe Axiata will continue to be interested in assets in Pakistan and regionally,” said the rating agency.
edotco’s stated growth strategy is to become the fifthlargest tower company globally by 2020.
It was reported that the deal was called off after regulators there failed to provide all approvals for the transaction announced a year ago.
The deal, announced in August last year, would have made edotco the second-largest multi-country tower operator globally and the eighth-largest independent tower firm, said a report. — Bernama