Axiata buys 80% stake in Laos firm
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Axiata Group Bhd’s 63%-owned subsidiary edotco Investments (Labuan) Ltd (edotco Labuan) is acquiring an 80% stake in Laos’s Mekong Tower Company Ltd (MTCL) for LAK12.8 billion (RM6.08 million) cash. Axiata said in a filing with the stock exchange that edotco Labuan had entered into a share subscription agreement (SSA) with Viphet Sihachakr (VS) and MTCL for the purchase.
The SSA is subject to, amongst other, procurement of operating licence or other form of authorisation from the Ministry of Post and Telecommunications of the Government of Laos to MTCL for the provision of infrastructure solutions for telecommunications and network operators in Laos; registration of MTCL with the Ministry of Industry and Commerce of the Government of Laos; and procurement by VS of viable business including relevant concessions and/or incentives in Laos.
Unless waived by the parties, the conditions must be satisfied not later than six months from the date of the SSA.
“The proposed subscription provides opportunities for edotco group to expand into a new market and grow organically via build-to-suits and inorganically with sizeable sale-and-leaseback prospects,“ Axiata said.
The Laos tower market is expected to undergo intense growth in tandem with a national drive towards 4G adoption, with an estimated demand of no less than 5,000 towers over the next three years, underscoring the need for an independent tower player to meet the requisite capital expenditure and cost optimisation burdens incumbent on local mobile network operators.
Questions & Answers
Q.Who is selling the 80% stake in Mekong Tower Company Ltd?
Who is selling the 80% stake in Mekong Tower Company Ltd?
edotco Labuan entered a share subscription agreement with Viphet Sihachakr and MTCL for the purchase. The article implies Viphet Sihachakr is the seller.
Q.What conditions must be met for the acquisition to proceed?
What conditions must be met for the acquisition to proceed?
MTCL needs an operating licence, registration with the Ministry of Industry and Commerce, and viable business procurement, including concessions or incentives, by Viphet Sihachakr.
Q.How long do the parties have to satisfy the conditions for the acquisition?
How long do the parties have to satisfy the conditions for the acquisition?
Unless waived by the parties, the conditions must be satisfied not later than six months from the date of the share subscription agreement.
Q.What is the expected demand for new towers in Laos over the next three years?
What is the expected demand for new towers in Laos over the next three years?
The Laos tower market is expected to see demand for no less than 5,000 towers over the next three years, driven by 4G adoption.
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