Business

Tuesday August 25, 2009

Axiata results take back seat to talk of stake sale

By B.K. SIDHU and YVONNE TAN


PETALING JAYA: Axiata Group Bhd will announce its results tomorrow but what appears to be taking prominence is speculation that its largest shareholder Khazanah Nasional Bhd may sell its stake in the company.

Such talk is not entirely new and to date, big names have been linked to it.

Khazanah has a 44.5% stake in the regional mobile telecommunications operator.

Whether a proposal has landed at the Economic Planning Unit (EPU) cannot be ascertained at this point but the scheme is said to entail Khazanah selling the stake to a company that is linked to a prominent businessman.

Last week, there was similar talk of a proposal submitted to the EPU for the takeover of PLUS Expressways Bhd, which is under UEM Group Bhd’s stable, but this was denied by the minister in charge of EPU, Tan Sri Nor Mohamed Yackop.

With one “target” named after another, many are wondering which company will be the next to be associated with a takeover bid.

At the Invest Malaysia conference last month, Khazanah managing director Tan Sri Azman Mokhtar said the investment agency would be more active in pursuing deals in the second half of this year.

“Acquisitions are one possibility, and if we think values have gone up and this is the right time to divest, we are open for business,” he said.

If speculation about Axiata turns out to be true, it would be very interesting to see who would be taking over the stake and at what price.

However, since Khazanah has always been a strong parent to Axiata, the question arises about Axiata’s forward outlook without its parent.

When contacted, a Khazanah spokesman said the agency did not comment on speculation. Axiata gave a similar response, saying in an email that “Axiata does not respond to rumours or news that is speculative in nature.”

Meanwhile, Axiata’s second-quarter results were expected to show an improvement thanks to wholly owned mobile broadband provider Celcom (M) Bhd, analysts said.

“Axiata’s second-quarter results are likely to show Celcom continuing to grow revenue on the back of rising wireless broadband penetration along with stable earnings before interest, tax, depreciation and amortisation margins (45%), in our view,” an analyst said in his report.

Its operations in Indonesia, Sri Lanka and Bangladesh – represented by PT Excelcomindo Pratama Tbk, Dialog Telekom Ltd and TM International (Bangladesh) Ltd respectively – are all likely to receive a boost from stronger foreign exchange rates as well.

“A turnaround in regional assets is key to further re-rating of the stock,” the analyst said.


AXIATA : [Stock Watch] [News]


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