Thursday 28 Mar 2024
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KUALA LUMPUR (March 16): Axiata Group Bhd has successfully priced its 10-year US$500 million Sukuk (Sukuk Issuance), which will be issued via its wholly-owned Malaysian-incorporated special purpose vehicle, Axiata SPV2 Bhd.

The Sukuk Issuance is the third issuance under Axiata's multi-currency Sukuk issuance programme with an aggregate nominal value of US$1.5 billion (or its equivalent in other currencies), established on July 17, 2012.

Proceeds of the Sukuk Issuance will be utilised to fund the proposed acquisition of Ncell Pte Ltd.

In a statement today, the company said the Sukuk Issuance has been assigned ratings of Baa2 and BBB by Moody's Investors Service Inc and Standard & Poor's Ratings Services, respectively.

It said the Sukuk Issuance, which will be listed on Bursa Malaysia (under the Exempt Regime) and the Singapore Exchange Securities Trading Ltd, is structured based on the Shari'a principle of Wakala whereby the underlying assets are 100% airtime vouchers, representing an entitlement to a specified number of airtime minutes on the mobile telecommunications network of subsidiaries of Axiata for on-net calls.

Axiata said the bookbuilding exercise commenced with an initial price guidance of US Treasuries (UST) +2.6% area.

It said demand for the Sukuk Issuance led to a final price guidance of UST +2.45% area ±0.05% at Asian close/London mid with books in excess of US$1.4 billion.

Axiata said the Sukuk Issuance was finally priced at the tight end of final price guidance, with a final book of over US$900 million orders, representing a bid-to-cover ratio of over 1.8 times, and a final yield of 4.357%.

The issuance by Axiata attracted interest from a diverse group of Islamic as well as conventional investors, comprising asset management companies, financial institutions, insurance companies, and sovereign wealth funds, with participation from 64 accounts.

Axiata president and group chief executive officer Datuk Seri Jamaludin Ibrahim said the strong participation from international investors for this Sukuk Issuance is validation of Axiata's solid fundamentals.

"… we are pleased that investors are supportive of our aspirations as a regional telecommunications champion. This Sukuk Issuance, the third drawdown off Axiata's US$1.5 billion multi-currency Sukuk issuance programme, continues to demonstrate Axiata's ability to access the debt capital markets as it saw strong cross-border participation from a wide and diverse base of investors, with 71% from Asia, 11% from Europe and 18% from Middle East.

"Charting a new benchmark, we have taken this opportunity to build Axiata's curve with a 10-year issuance maturing in 2026, in line with our long-term strategy and growth plans. Axiata will continue to look towards opportunities in the capital markets to strengthen our capital base," he said.

Jamaludin said that through Ncell, Axiata will be entering the fast-growing brownfield market of Nepal with a controlling stake of its number one telecom operator.

"As a rare and opportunistic asset, Ncell would be immediately accretive to Axiata's financials when consolidated.

"At the same time, Axiata's regional footprint will expand to a total of 10 countries in Asia, strengthening its position to further unlock shareholder returns and sustain long-term growth," he said.

 

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