PT XL Axiata Tbk., (EXCL) a unit of Malaysia’s largest mobile-phone operator, will acquire PT Axis Telekom Indonesia from Saudi Telecom Co. (STC) and settle $865 million of the closely held carrier’s debts. XL Axiata, a 66.5 percent-owned subsidiary of Axiata Group Bhd. (AXIATA), is paying $100 cash for the share capital of Axis, according to a stock exchange filing in Kuala Lumpur today. The price represents Axis’s enterprise value on a cash-free and debt-free basis, parent Axiata Group said in the filing.

1. XL Jakarta Axiata Axis Capital Group PT
Telekom: Axiata Unit Buys Axis Telekom
by Assuming $865 Million Debt

2. PT XL Axiata Tbk., (EXCL) a unit of Malaysia’s
largest mobile-phone operator, will acquire PT
Axis Telekom Indonesia from Saudi Telecom Co.
(STC) and settle $865 million of the closely held
carrier’s debts.

3. XL Axiata, a 66.5 percent-owned subsidiary of
Axiata Group Bhd. (AXIATA), is paying $100 cash
for the share capital of Axis, according to a stock
exchange filing in Kuala Lumpur today. The price
represents Axis’s enterprise value on a cash-free
and debt-free basis, parent Axiata Group said in the
filing.

4. The acquisition will allow XL Axiata to add
services and coverage after the company said in
August second-quarter profit slumped 55 percent to
354.92 billion rupiah ($31 million) from a year
earlier. Ten operators compete for subscribers in
Indonesia’s mobile market, the second-highest
number in Asia after India, in what XL Axiata
described in May as an “unsustainable situation.”

5. “All industry participants are in agreement that the
industry must consolidate,” XL Axiata President
Director Hasnul Suhaimi said in the statement.
“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.”

6. XL Axiata jumped 4.8 percent to 4,400 rupiah as of
3:22 p.m. in Jakarta, paring the stock’s decline this
year to 23 percent. It had the third-biggest
percentage gain in the MSCI Emerging Markets
Index today. Axiata Group increased 0.4 percent to
6.93 ringgit in Kuala Lumpur trading.

7. “For companies that want to grow in Indonesia like
Axiata, acquisition is the fastest way,” Ang Kok Heng,
who helps manage $428 million of assets as chief
investment officer at Phillip Capital Management Sdn.
in Kuala Lumpur, including Axiata Group shares, said
by phone today. “You’d get customers, people and the
broadband.”
The transaction still needs regulatory approvals and is
expected to be completed by the end of March, the
filing shows.