Malaysia’s Edotco, backers plan stake gross sales in scorching telco towers market -sources

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SINGAPORE — Asia-focussed telecoms tower agency Edotco Group, its Malaysian guardian Axiata and a Japanese backer are in talks with traders for stake gross sales, in a deal that might increase about $1.2 billion, 4 sources accustomed to the matter mentioned.

The transfer comes as international infrastructure funds are pouring big sums of cash to accumulate capital-intensive telecom infrastructure property in Southeast Asia, seeing robust development alternatives.

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The sources mentioned discussions are going down for a minority stake to be bought within the decade-old Edotco, which is 63% owned by Axiata. Nonetheless, three of the sources mentioned there was a chance that Axiata might take into account giving majority management with the intention to safe a deal.

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The sources declined to be recognized as they weren’t licensed to talk to the media.

Axiata and Edotco declined to remark.

Two of the sources mentioned cash-rich infrastructure funds akin to U.S.-based Stonepeak and International Infrastructure Companions, and a gaggle led by Japanese buying and selling agency Mitsui & Co, are amongst potential patrons for the stake gross sales.

International Infrastructure Companions declined to remark. There was no response from Mitsui and Stonepeak to Reuters queries.

Reuters is first to report on the id of the potential patrons within the whole stake gross sales price about $1.2 billion and likewise the potential of Axiata ceding majority management of Edotco.

The sources mentioned the majority of the proceeds from the share gross sales will possible fund Edotco’s enterprise growth.

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Innovation Community Corp of Japan (INCJ), which turned the tower firm’s second-biggest investor about six years in the past with a $400 million funding or a couple of 20% holding, can be looking for to promote most of its stake.

When requested for a remark by Reuters on Friday, INCJ mentioned it could reply the next week. The state-backed fund had tried to promote down its stake in the previous couple of years.

Edotco additionally counts Malaysian sovereign wealth fund Khazanah Nasional and pension fund KWAP amongst its traders.

Whereas broader dealmaking exercise has fallen sharply over the previous 12 months because of weak fairness markets and rising rates of interest, telecom tower property have been a brilliant spot.

In addition to its core markets of Malaysia and Bangladesh, Edotco has constructed up a portfolio of towers in Myanmar and Cambodia, forayed into Indonesia final 12 months and purchased property within the Philippines, amongst others.

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It has expanded the variety of towers it operates and manages to 55,000, making it the world’s sixth-largest tower firm.

Axiata has been unsuccessful in its earlier makes an attempt to chop its stake in Edotco, partly because of sensitivities linked to Edotco’s enterprise in Myanmar, the place prime generals led a coup in 2021 after 5 years of tense power-sharing beneath a quasi-civilian political system that was created by the army.

The sources mentioned problems surrounding any buy of the Myanmar property had been a priority for some potential patrons, whereas there additionally muted curiosity for its tower companies in Pakistan and Bangladesh. (Reporting by Anshuman Daga and Yantoultra Ngui; Modifying by Kane Wu and Susan Fenton)