This article first appeared in The Edge Financial Daily on September 13, 2017

KUALA LUMPUR: Axiata Group Bhd’s 83.32%-owned subsidiary, Dialog Axiata PLC, has acquired an 80.34% stake in Colombo Trust Finance PLC (CTF) for RM29.49 million in order to expand its digital financial services.

The acquisition had been made via a share purchase of 37.37 million ordinary shares in CTF from Cargills Bank Ltd on the Sri Lankan stock exchange for 28.70 Sri Lankan rupees, or 79 sen apiece, Axiata said in an announcement yesterday.

Dialog will subsequently make a mandatory takeover offer for the remaining 19.66% stake in CTF at the same price, Axiata said.

CTF, which is a licensed finance company registered under the Monetary Board of the Central Bank of Sri Lanka, provides financial products and services covering fixed deposits, lease and hire purchase facilities, margin trading, mortgage loans, demand loans, revolving loans, cheque discounting, factoring, and other credit facilities.

Dialog, which has been operating in the mobile payment market since 2012 with eZCash services, said the acquisition would help it deliver a suite of products and services that would expand financial inclusion in Sri Lanka.

According to Axiata, the acquisition was funded through internal and external funding. It is not expected to have any impact on the issued and paid-up share capital of Axiata and will not have any material impact on the earnings, gearing and net assets of the group for its financial year ending Dec 31, 2017.

Shares in Axiata closed up one sen at RM5.13 to give the group a market capitalisation of RM46.16 billion.