Axiata Group via its wholly-owned subsidiary, Axiata Investments has accepted an offer by Konnectivity for the Group’s entire stake in Singapore's M1 for approximately RM1.65 billion (~USD$400 million).
The Group said it will effectively divest its 28.7 percent stake in M1 and exit its investment in Singapore with an estimated gain of RM126.5 million from this deal. Axiata’s investment in M1 commenced in 2005 and the Company had steadily contributed to the Group’s growth over the years with dividends amounting to RM1.1 billion in the last 10 years.
Axiata said it has made the decision to accept the Offer due to the need for capital reallocation and new priorities in line with its vision to be the Next Generation Digital Champion by 2022 and the investments required to achieve that. The Group also prefers not to be a minority investor in a potentially privatised company, making the investment illiquid.
Over the last many years, all of Axiata says its operating companies (“OpCos”) in the region have outperformed the market, in terms of revenue market share; some having done so significantly. The Group’s OpCos are in the top two largest mobile company positions in their respective markets, with many of them being best performing companies in most financial metrics.
Jamaludin Ibrahim, President & Group CEO, Axiata
It is actually not an easy decision for us. We like our investment in M1 and believe in its long-term future. At the same time, we need to undertake a major reprioritisation and make better use of our capital to chart a new chapter for the Group in line with our new vision whilst also further enhancing our shareholders’ value.
