September 22, 2018 / 1:04 AM / in 24 days

Malaysia's Axiata in talks for more tower acquisitions over next 12 months

(Removes reference to acquisitions value in headline and lede)

By Liz Lee

KUALA LUMPUR (Reuters) - Malaysian telecoms firm Axiata Group Bhd’s (AXIA.KL) tower unit is working on acquisition deals that it aims to complete in the next 12 months to boost its infrastructure portfolio, the company’s chief executive officer said.

Suresh Sidhu, chief executive officer of edotco Group Sdn Bhd, told Reuters on Friday he was optimistic that two to three deals could materialize in the company’s existing markets where the sector has developed.

edotco, 62.4-percent owned by Axiata, currently operates and manages a regional portfolio of more than 28,000 towers in Malaysia, Myanmar, Bangladesh, Cambodia, Sri Lanka and Pakistan.

“The priority is to look at the current footprint we are in and look for opportunities to bulk up and add more towers there,” Sidhu said. “Again, Malaysia, Myanmar, Bangladesh are countries of higher interest to us.”

On Tuesday, the telecommunications infrastructure company canceled a $940 million deal to acquire 13,000 towers from a unit of Pakistan Mobile Communications Ltd (PMCL) as regulators failed to provide all approvals for the transaction to go through.

The deal, in works for more than a year, was expected to propel the company to the eighth spot among largest independent tower firms globally.

Sidhu was unfazed by the Pakistani deal being scrapped, noting that the other deals combined, if sealed, could provide similar growth.

The deals under discussion could add around the same number of towers to its portfolio as the scrapped Pakistani deal would have, the company said. It did not give a value for the acquisitions under discussion.

Sidhu said there was no urgency to raise funds to fuel acquisitions, as the company still has $200 million in cash reserves from the $700 million it raised in 2016 and last year from shareholders.

He said had the Pakistani deal gone through, it would have depleted edotco’s cash and sped up fundraising needs for future growth, whether through equity or debt.

However, any fundraising exercise would probably be put off until mid-2019, he said.

“The deal pipeline is healthy and we have the luxury of making sure we do deals that we want to ... not for the purpose of pleasing the capital markets,” Sidhu said, noting that edotco has sufficient organic growth to sustain itself.

Sources had said edotco’s plan to raise at least $500 million in an initial public offering targeted for the end of this year or early 2019 could be scaled back or delayed after the Pakistani deal was called off.

edotco was also looking at Thailand, Laos, Vietnam and the Philippines as potential markets to enter, Sidhu said.

Reporting by Liz Lee; Editing by Diane Craft and Tom Hogue

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