edotco to buy 13,000 towers in Pakistan for RM4b

The firm will be purchasing the towers from PMCL together with DH Corp


Edotco Group Sdn Bhd, the infrastructure arm of Axiata Group Bhd, is proposing to buy 13,000 towers in Pakistan together with Dawood Hercules Corp Ltd (DH Corp) for RM4.01 billion.

edotco, which recently acquired Tanzanite Tower Pte Ltd and its 700 towers, will be purchasing the towers from Pakistan Mobile Communications Ltd (PMCL) together with DH Corp, a listed investment conglomerate in Pakistan.

Through Tanzanite — now incorporated as a subsidiary of edotco Pakistan Pte Ltd (edotco PK) — edotco has entered into an agreement with PMCL to acquire the latter’s tower unit, Deodar Pte Ltd and its portfolio of over 13,000 tower assets.

Under the transaction partnership, edotco will hold a controlling 55% stake in edotco PK, with DH Corp investing into the remaining 45%.

The total transaction consideration will be funded through a combination of external debt of US$600 million (RM2.56 billion), plus an equity split of US$174 million by edotco and US$166 million by DH Corp for their respective stakes.

The proposed acquisition is edotco’s biggest expansion plan to date, bringing its portfolio of towers to 40,000 across six countries, of which 32,000 are owned and operated by edotco and a further 8,000 managed through a range of services provided.

It will effectively place edotco as the eighth-largest independent tower company and second-largest multi-country tower operator globally. Axiata president and group CEO Tan Sri Jamaludin Ibrahim (picture) said the proposed transaction will bring immediate financial accretion for edotco.

“It will solidify edotco’s position as a leading independent tower company and also create a more balanced portfolio in having three signification operations that are in Malaysia, Bangladesh and Pakistan,” he said while announcing the proposed acquisition in Kuala Lumpur recently.

He added that however, there are no firm plans or any concrete timeline for a public listing of edotco.

The proposed acquisition indicates the company’s commitment to Pakistan as a key growth market and confidence in the country’s telecommunications infrastructure market prospects.

Mobile penetration in Pakistan as at end-2016 stood at around 73%, while data penetration was at around 24%, leaving high growth potential in a population of over 200 million.

Upon completion of the transaction, edotco will reinforce its position as the largest independent tower company in Pakistan. PMCL, the nation’s largest mobile network operator, will be its anchor tenant.

Subject to the customary and regulatory conditions precedent being fulfilled, the acquisition is scheduled for completion in the fourth-quarter of 2017.