Axiata unit purchases Axis Telekom from Saudi Telecom
PT XL Axiata Tbk would be purchasing PT Axis Telekom Indonesia from Saudi Telecom Co. The Axiata Group subsidiary would be settling the USD 865 million debt incurred by Axis. It would also pay USD 100 cash for Axis Telekom's share capital. According to a regulatory filing submitted by the Axiata Group to the Kuala Lumpur Stock Exchange, the cash payment represented the enterprise value of the liabilities-ridden firm. The Axiata Group is the biggest mobile phone carrier in Malaysia.
The purchase of Axis Telekom would enable Axiata to expand its coverage and offer more services to its subscribers. Last month, Axiata announced a decline of 55% of its second quarter profit compared to the same period last year. There are currently ten operators competing for customers in Indonesia's mobile industry.
XL Axiata President Director Hasnul Suhaimi said consolidation in Indonesia's mobile market was necessary. "This will be driven by companies like XL who have the will and ability to accelerate the development of high quality communication services in Indonesia," he added.