Axiata disposes of M1 stake for RM1.6b

Axiata to gain around RM126m from this deal and use the cash proceeds for corporate purposes and/or repayment of debts


Axiata Group Bhd’s wholly owned subsidiary Axiata Investments (Singapore) Ltd has accepted the voluntary conditional general offer from Konnectivity Pte Ltd for its 28.67% stake in M1 Ltd for SG$546.7 million (RM1.65 billion) or SG$2.06 per share.

Axiata is expected to gain around RM126.5 million from this deal after deducting some RM1.54 billion of carrying value and realised foreign-exchange reserve of investment in M1.

“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 while also further enhancing our shareholders’ value,” Axiata president and group CEO Tan Sri Jamaludin Ibrahim (picture) said in a statement last week.

“I thank all our fellow shareholders, partners, management and staff of M1 for contributing to the success of the company and for all the collaborations with Axiata over a decade. I also wish Keppel Corp Ltd and Singapore Press Holdings Ltd the best of luck in the new phase of growth and the new chapter for M1,” he added.

Axiata said the cash proceeds from the proposed disposal are intended for general corporate purposes and/or repayment of existing debts.

The proposed disposal is undertaken in consideration of Axiata’s overall portfolio rebalancing strategy and general management of Axiata’s balance sheet, with the specific objective being the enhancement of overall Axiata shareholders’ value and investing in future growth opportunities.

Despite the sale, Axiata believes there is long-term potential for the Singapore market once the competition and market disruption stabilise.

Based on market benchmarks involving entrance of new players around the globe, the market normalisation and stabilisation period will normally be within the medium term post new market entrance.

Axiata closed one sen or 0.15% lower at RM3.94 last Friday, with a market capitalisation of RM35.74 billion.