XL Axiata falls as Malaysian parent said planning to cut stake

[KUALA LUMPUR] PT XL Axiata, the Indonesian wireless carrier, fell to the lowest in nearly a year after people with knowledge of the matter said its Malaysian parent company is planning to sell part of its stake.

Shares of XL Axiata dropped as much as 4.9 per cent Tuesday and were down 3.4 per cent to 2,560 rupiah at 12:29am in Jakarta, headed for their lowest close since October 2015.

The benchmark Jakarta Stock Exchange Composite Index fell 1.6 per cent. Axiata Group Bhd, Malaysia's biggest mobile-phone operator, is seeking to trim stakes in some of its overseas operations in deals that could raise as much as US$700 million, people familiar with the matter said.

Axiata, based in Kuala Lumpur, is seeking a buyer for about 11 per cent of Indonesian unit XL Axiata, according to the people. It is also selling as much as 30 per cent each of listed Sri Lanka unit Dialog Axiata Plc and closely held Cambodian subsidiary Smart Axiata Co, the people said, asking not to be identified because the information is private.

Total debt at Axiata has risen 55 per cent since the end of 2014 to reach 21.5 billion ringgit (S$7.1 billion) at the end of June, data compiled by Bloomberg show.

Axiata, which has interests in 10 countries across Asia, will use part of the proceeds from the divestments to cut borrowings, the people said. Axiata continuously reviews various strategic options to enhance shareholders' value, the company said in an e-mailed statement Tuesday.

Since the middle of last year Axiata has been exploring options including rebalancing its portfolio and reviewing its shareholdings across subsidiaries, according to the statement.

The Malaysian company owns 83.3 per cent of Dialog Axiata in Sri Lanka and 95.3 per cent of Cambodian subsidiary Smart Axiata, according to its annual report. It also owns 66.4 per cent of its Indonesian unit XL Axiata, whose shares have fallen 26 per cent this year.

Axiata also has operations in Bangladesh and Pakistan, as well as minority stakes in Singapore telecommunications firm M1 Ltd and Indian wireless carrier Idea Cellular Ltd.

In April, Axiata completed the US$1.4 billion acquisition of an 80 per cent stake in Nepal's Ncell Pvt.

BLOOMBERG