Asian operator group Axiata has sold a 10% holding in its Cambodian unit Smart Axiata for $66 million to Japan’s Mitsui.
The price of the stake was based on an equity value of $724 million after taking into account extra funds from the dividends that constituted part of the deal. With the deal on track to close by the end of May, Axiata will be left with an 82.5% holding in Smart. As part of the deal, Mitsui also has a call option to acquire a further 10% holding in Smart, which it can activate within 12 months of the agreement closing.
Axiata, which is headquartered in Malaysia, has reportedly been trying to divest part of its holdings in three of its international units in an attempt to generate as much as $700 million to help it reduce its debt. In September last year, it was reported that the group could sell stakes of up to 30% in both Smart and its Sri Lankan unit, Dialog Axiata, as well as approximately 11% of its 66.4% holding in Indonesia’s XL Axiata.
The group’s president and CEO Jamaludin Ibrahim stated: “This strategic partnership with Mitsui will support the growth efforts of Smart, particularly in the areas of digital services and IoT and our vision of becoming a new generation digital champion. With Mitsui in the fold, Smart will be in a position to offer enhanced digital services that would leapfrog Cambodia’s digital economy. We look forward to leveraging on synergies from this strategic partnership.”
He added that Smart had “consistently outperformed its competitors with its clear customer proposition, innovative product solutions and effective cost controls”, noting that Axiata would retain its majority stake in the Cambodian operator.
Smart has a 30% share of the Cambodian mobile market, putting it in second place with 8.4 million subscribers. Of these, around 7% have 4G tariffs.