Axiata Group Bhd’s 66.5 per cent-owned subsidiary, PT XL Axiata Tbk, is acquiring PT Axis Telekom Indonesia for US$100 (about RM321) cash and would procure the repayment of about US$865 million (RM2.8 billion) of Axis’ indebtedness, collectively as consideration.
Axiata, in a filing to Bursa Malaysia here today, said under the sale and purchase agreement, Teleglobal Investments B.V, a 100 per cent-owned subsidiary of Saudi Telecom Company, would sell the entire issued share capital of Axis for the consideration.
At the completion of the proposed acquisition, 95 per cent of the
acquisition shares would be held by XL and the remaining five per cent would be held by a local Indonesian shareholder, in accordance with Indonesian regulations.
All other amounts owing by Axis in excess of the indebtedness, with the exception of working capital, shall be settled by Teleglobal prior to the proposed acquisition.
Given the net liabilities position of Axis as of today, the cash
consideration of US$100 represents the consideration to be paid for the share capital of Axis.
The consideration represents the enterprise value of Axis, on a cash free and debt free basis, and has been primarily derived by valuing the potential benefits and synergies that XL expects to extract from the proposed acquisition.
The consideration would be funded via internally generated funds of XL, borrowings and a shareholder loan from Axiata.
Save for the settlement of the indebtedness, XL would not expressly assume any liabilities pursuant to the proposed acquisition, it said.
XL, which operates commercially since October 1996, is currently a cellular service provider in Indonesia with 54 million subscribers as at June 30, 2013.
Via the proposed acquisition, XL is expected to have spectrum parity, in particular enhanced and compatible spectrum in the 1,800 MHz bandwidth.
This would lead to improvements in the quality of XL’s 2G and 3G services, which in turn provides significant benefits to customers and all stakeholders.
Upon completion, the existing business functions, systems and personnel of Axis may be integrated into those of XL.
The proposed acquisition, which is expected to contribute positively to the future earnings of the Axiata group in the medium to long term, is expected to be completed by March 31, 2014.-- Bernama