Malaysia: Axiata shares climb as carrier said to consider $500m tower IPO

The Axiata headquarters building is seen in Kuala Lumpur May 28, 2014. REUTERS/Samsul Said/Files

Axiata Group Bhd. rose the most in more than two years after people with knowledge said Malaysia’s biggest wireless carrier is considering an initial public offering of its tower unit that could raise at least $500 million.

Shares of Axiata climbed as much as 6.6 percent Friday, the most since August 2015. They were up 4.8 percent to 5.72 ringgit at 11:39 a.m. in Kuala Lumpur, outperforming the 0.7 percent increase in the country’s benchmark index.

Axiata has been speaking to potential advisers to explore a domestic listing of Edotco Group Sdn. that could take place as soon as this year, according to the people with knowledge of the matter. The Kuala Lumpur-based company may invite banks to formally pitch for a role on the deal this quarter, the people said, asking not to be identified because the information is private.

Malaysia hosted $1.7 billion of first-time share sales last year, more than five times the amount raised in 2016, data compiled by Bloomberg show. Edotco would join Edra Power Holdings Sdn., the country’s second-biggest independent power producer, and Brunei’s largest bank in seeking to list on the Kuala Lumpur stock exchange this year.

Deliberations are at an early stage, and Axiata could decide not to proceed with the offering, according to one of the people. Representatives for Axiata and Edotco declined to comment.

Edotco raised $700 million in a private placement last year from investors including Axiata’s top shareholder, sovereign fund Khazanah Nasional Bhd., and government-backed Innovation Network Corp. of Japan, according to an April statement. Malaysia’s second-biggest pension fund, Kumpulan Wang Persaraan (Diperbadankan), also invested in Edotco through the deal, which reduced Axiata’s stake to 62.4 percent.

Axiata Chief Executive Officer Jamaludin Ibrahim said in a 2016 interview that the mobile operator plans to expand its overseas infrastructure operations ahead of an eventual listing of the business. Edotco and a partner bought about 13,000 towers in Pakistan from Veon Ltd. for $940 million last year. Earlier in the year, it completed the $89 million purchase of Tanzanite Tower Pvt, which owns about 700 phone towers in the country.

Edotco was started in 2012. It owns more than 26,000 towers spread across Malaysia, Sri Lanka, Bangladesh, Cambodia, Pakistan and Myanmar, according to the company’s website.

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