(July 10): Axiata Group Bhd, Malaysia’s biggest wireless carrier by revenue, plans to sell stakes in some of its businesses and list its technology units to reduce debt taken to fund the acquisition of telecom assets overseas.

“We will start with monetisation,” chief executive officer Vivek Sood said in an interview at his office in Kuala Lumpur.

Axiata’s balance sheet has been bogged down by debt, which ballooned to RM36.7 billion (US$7.9 billion) at the end of March, from RM25.7 billion at the end of 2019, data compiled by Bloomberg show. The debt load shot up after its overseas expansion last year, including buying telecom towers in the Philippines and a broadband and cable TV provider in Indonesia.

The planned stake sale in its wireless tower unit Edotco Group Bhd is among options Axiata is weighing to slash debt, Sood said. Edotco was exploring selling new shares to raise as much as US$750 million and has shortlisted candidates for the transaction, Bloomberg News reported in March.

“We’re are still evaluating the offers and haven’t made a decision,” Sood said, adding that the company may explore a listing if it decides against the stake sale.

Axiata is revamping PT Link Net in Indonesia into a fixed broadband infrastructure company and positioning PT XL Axiata as a converged mobile, fixed and content service provider, Sood said. There could be a stake sale in Link Net afterwards, he added.

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Founded in 2008, Axiata has 150 million subscribers for its services across Southeast Asia and Pakistan. The company is exploring a strategic review of its businesses with total assets of about RM81.6 billion, Bloomberg News reported in March. Shares of Axiata have fallen about 18% this year.

While some of Axiata’s global peers such as Norway’s Telenor ASA have exited or are conducting strategic business review in high-risk countries such as Myanmar and Pakistan, the Malaysian carrier is staying put, citing long-term growth potential. But these operations must fund themselves and Axiata may sell stakes in these units to strategic investors, Sood said.

Axiata has recently expanded into digital financial services and artificial intelligence. Its fintech arm Boost has a valuation of US$400 million. Axiata Digital & Analytics (ADA), an AI firm backed by SoftBank Corp and Sumitomo Corp, is worth US$500 million, Sood said. ADA has set sights on becoming a unicorn, a term that describes startups worth US$1 billion or more, by 2026, Sood said. Axiata plans to bring in new investors in Boost and ADA and list them in two- to three years, he added.

Excerpts from the interview:

Axiata’s shares are down about 17% so far this year, the third-biggest decliners on the country’s main stock index. The drop is a “short-term reaction” caused by lack of visibility of the company’s future strategies, Sood said.

“Once we clearly state our future value creation model by year-end, investors will start realising what they can expect from us,” he said.

In Malaysia, Axiata will focus on combining the operations of Celcom Malaysia Bhd and DiGi Telecommunication Bhd to extract synergies after completing the merger in December, Sood said.