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Monday July 30, 2012

What’s M'sian billionaire Ananda Krishnan really up to?

Behind The News - By Fintan Ng


ANYTHING that involves the media-shy T. Ananda Krishnan, the country's second-richest person after Tan Sri Robert Kuok, will always be of interest, not just to investors and the media who avidly follow his every corporate move but also to the public at large, who know precious little of the tycoon.

Last Friday, stock market data showed that Maxis Communications Bhd had pared down its stake in Maxis Bhd to 65% from 70% via several off-market deals.

Ananda has a 45% stake in Maxis Communications via his investment vehicle Usaha Tegas Sdn Bhd, with Saudi Telecom Co and bumiputra shareholders owning the remaining 25% and 30% respectively.

Filings with the stock exchange showed that a total of 375 million shares were sold to purchasers by CIMB Investment Bank Bhd and Credit Suisse Securities (M) Sdn Bhd or their respective affiliates in accordance with the terms and conditions of a placement agreement dated July 26.

Analysts covering the stock said the stake was sold to mostly local funds. The local funds with a substantial stake in the company include the Employees Provident Fund, with a 5.30% stake, and Skim Amanah Saham Bumiputera, with a 5.21% stake as of last Friday.

They said it was hard to fathom why Ananda sold down his stake in Maxis. The most obvious reason would be the need to fund the expansion of his overseas businesses, which include a 74% stake in Chennai-based telecommunications operator Aircel Ltd held under Maxis Communications.

It is not often one gets a picture of M'sian billionaire Ananda Krishnan. Here South East Asia's second richest man, Ananda Krishnan, is pictured attending the Allen & Co Media Conference in Sun Valley, Idaho July 11, 2012. Others invited included Warren Buffett, Bill Gates and Mark Zuckerberg have. - REUTERS/Jim Urquhart

“Aircel has been quite aggressive in the rollout of the 3G spectrum,” a senior analyst with a local investment bank said.

Recall that when the then listed Maxis Communications and Astro All Asia Networks plc were taken private in 2007 and 2010 respectively, the stated reason was that the high capital expenditure would preclude attractive dividends.

Analysts continue to see potential in Aircel despite Maxis Communications' and Ananda's legal troubles over the sale of Aircel's shares by Indian entrepreneur C. Sivasankaran to Maxis Communications.

Besides Aircel, Ananda, through Usaha Tegas, has other businesses which include leisure (TGV Cinemas, Tropical Islands Resort in Krausnick, Germany), property (owner of a 67% stake in Menara Maxis besides other property interests in various countries including Singapore), oil and gas (Bumi Armada Bhd and Pexco NV), media (Astro Holdings Sdn Bhd) and healthcare (cornerstone investor in recently listed IHH Healthcare Bhd).

Of course, there would always be cynics out there who would speculate on the reason or reasons for the stake sale, especially in the highly charged political environment of today.

They would refer to the sale of his power and gaming assets, divested in early March this year and last August respectively, as a move to exit politically risky businesses.

But for those who prefer to see conspiracies everywhere, they must also take note that the Maxis stake sale comes at a time when the stock market has been riding high, with the company's share price rising to a record RM6.92 on July 17.

Furthermore, Ananda does have a history of making shrewd deals, including the development of the KLCC Petronas Twin Towers project in the 1990s.

For whatever the reasons, there would always be speculation where deals related to the intensely private entrepreneur with roots in Kuala Lumpur's Brickfields suburb is concerned.

After all, at one time, he controlled four listed entities and would control three with the re-listing of Astro (the others being Maxis and Bumi Armada), expected to be sometime in October or November.

Analysts believe the shareholding structure of the relisted Astro would be similar to Maxis', with around 30% stake sold to investors.

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