(Updated)

Axiata unit to sell 5% stake in Indonesia-listed XL Axiata to Ferrymount for RM423.5m

Axiata unit to sell 5% stake in Indonesia-listed XL Axiata to Ferrymount for RM423.5m
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KUALA LUMPUR (Sept 27): Axiata Group Bhd's indirect wholly-owned subsidiary Axiata Investments (Indonesia) Sdn Bhd (AIISB) is selling a 5% stake in Indonesia-listed arm PT XL Axiata Tbk to Ferrymount Investments Ltd (FIL) for 1.44 trillion rupiah (RM423.5 million) or 2,700 rupiah (79 sen) per share.

"The disposal facilitates the timely introduction of Indonesia-focused investors in XL who acknowledge the value and opportunities in the domestic telecommunications sector,” said Axiata in a bourse filing on Monday.

According to Axiata, AIISB on Monday entered into a sale and purchase agreement (SPA) with FIL, Procap Partners Ltd and Tiga Investments Pte Ltd for the disposal of 533.41 million shares or 5% equity interest in XL. AIISB currently holds a 66.5% stake in XL.

Procap and Tiga Investments, acting as guarantors, will unconditionally and irrevocably guarantee the discharge by the buyer of its obligations under the SPA.

The disposal consideration of 2,700 rupiah (79 sen) represents a 5% discount to the one-month volume weighted average market price (VWAP) of XL shares up to and including Sept 23 of 2,847 rupiah (84 sen).

In conjunction with the disposal, FIL granted AIISB the option to purchase the 533.41 million XL shares from FIL at 2,700 rupiah per XL share (call option).

The call option is exercisable by AIISB in the event the three-month VWAP of XL shares is less than 2,300 rupiah per XL share on either March 31, 2022 or June 30, 2022.

The call option shall be extinguished if the three-month VWAP of XL share exceeds 3,300 rupiah at any time during the period from Jan 1, 2022 to June 30, 2022.

Axiata said the principals of Procap and Tiga Investments have extensive knowledge, experience, business partnerships and investments in Indonesia, as well as in global capital markets.

“Axiata is of the view that the disposal, which provides XL with access to the aforesaid business partnerships of Procap and Tiga Investments, among others, will place XL in a better operational footing in the near future.

“At the same time, Procap’s and Tiga Investment’s linkages to the Indonesian digital ecosystem will enable XL to actively engage and further develop its digital and value-added services to offer its current base of about 58 million customers, thereby improving user experience,” it said.

Procap is a company incorporated under the laws of the British Virgin Islands, with investments in various technology-focused companies based in Indonesia and Southeast Asia, including Provident Growth Fund (a private equity growth fund focused on technology investments in Southeast Asia) and GoTo Group, a “super app” created from the merger of two prominent Indonesian groups, namely Gojek (Indonesia’s largest online ride-hailing, food delivery and digital payment platform) and Tokopedia (Indonesia's leading e-commerce platform).  

Tiga Investments, meanwhile, is a company incorporated in November 2017 under the laws of Singapore by George Raymond Zage III.  Zage has been an active adviser and investor in Indonesia for over 25 years and formed Tiga Investments after leaving his role as the chief executive officer (CEO) of Farallon Capital Asia Pte Ltd.

At the noon break, Axiata shares were 10 sen or 2.44% lower at RM3.99, valuing the group at RM37.52 billion. XL Axiata was up 20 rupiah or 0.68% at 2,970 rupiah, bringing it a market capitalisation of 31.85 trillion rupiah.

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Kang Siew Li