No special dividend for Axiata shareholders after sale of M1 stake

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KUALA LUMPUR (March 22): Axiata Group Bhd shareholders are not getting any special dividend after the telco pocketed RM1.65 billion from the sale of a 28.7% stake in M1 Ltd.

In a filing with Bursa Malaysia today, Axiata said it will utilise RM1.06 billion or 64% of the cash proceeds for repayment of debt in the second quarter of this year.

The group said the remaining RM590.1 million from the cash proceeds will be used for cash requirements for working capital. There is no mention of special dividend in the announcement.

Axiata’s total borrowings were at RM19.12 billion as at Dec 31, 2018, of which RM14.65 billion is long-term debt. Its cash balance was at RM5.05 billion.

Nonetheless, the telco has normalised its dividend payout for the last financial year ended Dec 31, 2018 (FY18). It declared total dividend amounting to 9.5 sen per share, translates into an 85% dividend payout ratio, compared with 64% in FY17.

To recap, Axiata had on Feb 15 accepted the SG$2.06 per share voluntary conditional general offer by Konnectivity Pte Ltd, a joint venture by Keppel Corp and Singapore Press Holdings.

Axiata said the disposal would result in an estimated gain of RM126.5 million.

The sale of M1 stake,said analysts, helped to boost Axiata’s cash flow and put it in a better position to normalise its dividend payout after two years “dividend sabatica”.

Axiata’s share price gained six sen or 1.43% to close at RM4.27 today, giving it a market capitalisation of RM38.74 billion.