KUALA LUMPUR: Axiata Group Bhd
’s sale of its ts 28.67% stake in Singapore's M1 Ltd has improved its financial headroom and the sale proceeds will help cut debt, S&P Global Ratings says in a report.
The rating agency said on Monday the additional financial headroom will be useful to fund investment opportunities when they arise.
“Absence of dividends from M1 will not have a significant impact on Axiata’s earnings before interest, tax, depreciation and amortisation (Ebitda) and funds from operations (FFO).
S&P sees Axiata’s ratio of debt to Ebitda to be 1.5 times to 1.6 times in 2019, compared with estimate of 1.7 times to 1.8 times in September 2018.
Rating is not affected as company’s ratio of funds from operations (FFO) to debt will still be well short of upgrade trigger of 60%, according to a Bloomberg report, quoting S&P.
Last Friday, Axiata accepted conditional offer for M1 stake from Keppel Corporation Ltd and Singapore Press Holdings Ltd for the stake at S$2.06 (RM6.20) a share for S$546.7mil or RM1.642bil. This will see Axiata it netting a gain on disposal of RM126.45mil.
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