This article first appeared in The Edge Malaysia Weekly on October 29, 2018 - November 4, 2018

UNFAZED by its failure to complete its US$940 million purchase of Pakistan’s Deodar Pte Ltd, Axiata Group’s tower unit edotco Group Sdn Bhd is back on the prowl for acquisitions to enhance its appeal to investors.

“As we speak, we are looking at one or two (towerco acquisitions) within the next two years,” says Tan Sri Jamaludin Ibrahim, managing director/president and group CEO of Axiata Group, which controls 63% of edotco.

The acquisition of Deodar with its 13,000 towers would have made edotco the world’s second largest multi-country tower operator and eighth largest global tower company — a position that would have likely helped edotco raise more money for growth.

Jamaludin, however, says edotco is not short of investors and that an initial public offering (IPO) is not its only option to raise cash, should the need arise.

“We are not under pressure to do an IPO. We want edotco to be independent in the sense that when it invests, it must have the money. It [still] has a small war chest,” he says.

“Strictly speaking, even in the acquisition of Deodar, we wouldn’t have had to resort to an IPO because we have a lot of investors who are very interested in investing in edotco. There are easily half a dozen of them knocking on our door.”

He concedes, though, that the scrapping of the acquisition by mutual agreement on Sept 18 — more than a year after the deal was announced — was an unexpected turn of events for Axiata and edotco.

“In fact, we wanted to close the deal in the first quarter of the year. Then we thought second quarter as the process dragged on. We were very confident, so this was a surprise,” he tells The Edge.

While some regulatory hurdles were cleared, the deal did not get the approval of the Pakistan Telecommunication Authority (PTA) within the so-called “long-stop” deadline.

“What happened was we needed the PTA chairman to approve the deal. But there was no chairman for a while. Then they appointed an interim chairman but there was an election, which resulted in a new government. Nobody wanted to make a decision. We got caught in that cycle and hit the long-stop date,” Jamaludin explains.

He does not rule out the possibility of the Deodar deal being revived down the road but says Axiata is in a wait-and-see mode for now in Pakistan, where it still has a 700-tower subsidiary, Tanzanite Tower Private Ltd, which it had bought for US$89 million last year.

“I cannot commit but we are still on talking terms and we are looking at other opportunities. But right now, Pakistan — we are lying low. What we are trying to do is assess whether Pakistan is still conducive for further [foreign] investment,” he says.

What is certain is that edotco remains committed to solidifying its position as a leading multi-market tower company in the world.

As at June 30, edotco had a portfolio of 17,319 towers across five countries with the most being in Bangladesh (8,413) and second most in Malaysia (4,186). It also owns towers in Sri Lanka, Cambodia, Myanmar and Pakistan. All these put edotco among the top five multi-market global tower companies in the world. 

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