Business

Malaysia’s Axiata weighing options for Indonesian units, sources say

Axiata Group Bhd. is exploring options for its Indonesia businesses including combining its broadband and mobile services in the country, according to people with knowledge of the matter.

Malaysia’s biggest wireless company is laying the groundwork of a potential deal that would help boost synergies in its Jakarta-listed assets, said the people, who asked not to be identified as the process is private. Options under consideration also include bringing in a minority investor for its infrastructure assets as a way to fuel further investments and growth, the people said.

Axiata has controlling interests in both mobile operator PT XL Axiata and broadband provider PT Link Net, according to data compiled by Bloomberg. The companies have a combined market value of more than $2.1 billion.

Considerations are still at an early stage and there is no certainty that Axiata will proceed with a transaction, the people said. A representative for Axiata declined to comment. Link Net doesn’t have information on the plan, its representative said in response to a Bloomberg News query. Such discussion hasn’t happened at XL Axiata, the company’s corporate communication head said.

Telecommunications companies in Southeast Asia are exploring strategic options as they seek to boost growth. PT Telkom Indonesia has picked advisers for the merger of its broadband and wireless businesses, while it’s also looking at potential deals for its data center operation, Bloomberg News has reported. Philippine fiber provider Converge ICT Solutions Inc. is considering selling a stake in its infrastructure platform, people familiar with the matter have said.

Axiata Group owns a 76% stake in Link Net through its subsidiary Axiata Investments (Indonesia) Sdn., after completing an acquisition of a 66% stake and a mandatory offer, according to data compiled by Bloomberg. Axiata Group also owns about 61% of XL Axiata through another subsidiary.

XL Axiata, which has been listed on the Jakarta stock exchange since 2005, has a market value of 26.3 trillion rupiah ($1.7 billion). The wireless firm reported a 9% increase in revenue to about 14 trillion rupiah in the first half of 2022 and has 57.2 million subscribers, according to its latest earnings presentation.

Founded in 1996, Link Net offers high-speed broadband and cable television in Indonesia, its website shows. Its services are connected to 2.9 million homes, according to its corporate presentation. – BLOOMBERG

Dayang Norazhar

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