KUALA LUMPUR (June 22): Axiata Group Bhd and PT XL Axiata Tbk (XL Axiata) has completed the acquisition of 66.03% of PT Link Net Tbk (Link Net) for 8.72 trillion Indonesian rupiah, or approximately RM2.63 billion.
With the completion, Axiata’s wholly-owned subsidiaries, Axiata Investments (Indonesia) Sdn Bhd (AII) and XL Axiata now hold 46.03% and 20% respectively in Link Net previously held by Asia Link Dewa Pte Ltd and PT First Media Tbk.
AII also will be obligated to undertake a proposed mandatory tender offer (MTO) as per the regulations of the Indonesian Financial Services Authority, which is expected to be completed by 3Q22, Axiata said in a statement.
“With this acquisition, Link Net and XL Axiata will be well-positioned to leverage immediate synergies through their combined positions in wireless communication services, sharing of backbone and transmission networks and extensive relationships with customers in Indonesia.
“Coupled with XL Axiata’s enterprise offerings including mobile connections, Link Net will be poised to capitalize on the growing enterprise market in the country,” said Axiata, which is also in the midst of merging its mobile operator Celcom Axiata Bhd with Digi.com Bhd.
Meanwhile, Axiata’s Joint Acting Group CEOs Dr Hans Wijayasuriya and Vivek Sood said the group welcomes Link Net into the Axiata family as it strengthens its position in the region.
“Link Net is among the leading providers of high-speed broadband and cable TV in Indonesia, reaching 2.9 million homes across 23 cities, serving approximately 855,000 broadband and approximately 837,000 cable TV customers respectively.
“The well experienced and accomplished team at Link Net will be accelerating the company’s growth opportunities within existing as well as under-served areas. Increasing the momentum of our participation in Indonesia’s rapidly advancing digital economy is an exciting proposition we share with the Link Net Team,” the duo said in a statement.
XL Axiata’s President Director and CEO, Dian Siswarini, said it has identified multiple areas of synergies that can be unlocked together with Link Net, leveraging its collective strength in mobile connectivity, fixed broadband and content.
For the financial year ended December 31, 2021, Link Net’s revenue rose 10.3% year-on-year to approximately 4.5 trillion rupiah (approximately RM1.3 billion).
Axiata’s acquisition of the Link Net stake, proposed in January, had been met with resistance from Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF), which hold 14.67% and 16.91% respectively in the company.
Concerns raised included the impact on Axiata’s financial performance due to potential rise in debt levels “weighing on cash flow and earnings”, to which Axiata chairman Tan Sri Shahril Ridza Ridzuan responded that “the balance sheet is manageable”.
Shares in Axiata closed two sen or 0.72% lower to RM2.76, valuing the multinational telco at RM25.33 billion. Year to date, the counter has retreated by 32.68%.
Source: TheEdge - 23 Jun 2022
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