Axiata to Proceed with Dialog Axiata Airtel Lanka Merge

Ncell’s parent company Axiata Group Bhd is set to merge its Sri Lana subsidiary Dialog Axiata Plc with Indian operator Airtel Lanka, which is the subsidiary of Indian operator Bharti Airtel. The group has an 82.27% share in the company.

“The proposed transaction envisages Airtel being granted a stake in Dialog Axiata, representing the fair value of Airtel Lanka. Airtel would accordingly be issued new shares in Dialog Axiata upon completion of the transaction,” Axiata, Bharti Airtel and Dialog Axiata said in a joint statement.

At the moment, the three parties are discussing the proposed transaction and also talking with the regulators to ensure the deal aligns with the prevailing law and regulations of the South Asian country.

“The proposed transaction is subject to the signing of definitive agreements and necessary closing conditions including applicable regulatory and shareholder approvals,” the statement read, adding further announcements would be issued in due course should there be material developments.

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Dialog Axiata Airtel Lanka Merge

The Axiata and Airtel merger approaches after a discouraging financial report for the former in 2022. Axiata’s financial report FY 2022 showed that Dialog Axiata in Sri Lanka accounted for about 4 percent of the company’s net assets. The same year, the Sri Lanka operation posted a loss of RM 524.44 million. In FY 2021, the telco earned RM 354.19 million in profit. Likewise, the revenue in FY 2022 fell 14.83 percent to RM 2.52 billion from FR 2.95 billion in FY 2021. Sri Lanka’s national economic crisis, tax cuts, and Covid-19 affected the operator’s low financial returns in 2022.

In March, Bloomberg reported that Axiata was mulling over strategic reviews of its operations. The news agency said that the telco wants to streamline its businesses to raise funds to lower its debts. The options comprised selling off its assets outside of Malaysia.

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Axiata is Malaysia’s largest mobile operator in terms of revenues. It has subsidiaries in Indonesia, Sri Lanka, Bangladesh, Cambodia, Nepal, Myanmar, Thailand, and Pakistan.

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