Axiata to dispose of 5% stake in XL

KUALA LUMPUR: Axiata Group Bhd's subsidiary Axiata Investments (Indonesia) Sdn Bhd has entered into a sales and purchase agreement to dispose of 533,409,349 shares or a 5% stake in PT XL Axiata TBK to Ferrymount Investments Ltd for IDR1.44 trillion (RM423.5mil).

In a filing with Bursa Malaysia, the group said the disposal consideration of IDR2,700 or 79 sen per XL share represents a discount of about 5% to the one-month volume weighted average market price (VWAP) of XL shares to and including Sept 23, 2021, of IDR2,847.

The disposal is expected to be completed in October 2021 or on a date as agreed upon by the parties.

In conjunction with the disposal, Ferrymount Investment has granted Axiata Investments the option to purchase the 533,409,349 XL shares at IDR2,700 per share.

The call option is exercisable by Axiata Investment in the event the three-month VWAP of the XL share is les than IDR2,300 per share on either March 31, 2022 or June 30, 2022.

The call option shall be extinguished if the three month VWAP of the XL share exceeds IDR3,300 at any time during the period from Jan 1, 2022, to June 30, 2022.

According to the filing, Ferrymount Investment is indirectly held by Procap Partners Ltd and investor George Raymond Zage III, who also controls Tiga Investments Pte Ltd.

In its rationale for the disposal, Axiata said the principals of Procap and Tiga Investments have extensive knowledge, experience, business partnerships and investments in Indonesia, as well as in global capital markets.

"Axiata is of the view that the Disposal which provides XL with access to the aforesaid business partnerships of Procap and Tiga Investments amongst others, will place XL in a better operational footing in the near future.

"At the same time, Procap’s and Tiga Investment’s linkages to the Indonesian digital ecosystem will enable XL to actively engage and further develop its digital and value-added services to offer its current base of about 58 million customers, thereby improving the user experience," it said.

Axiata said the disposal will not have any effect on the issued share capital and substantial shareholders of Axiata, and will not have any material effect on the net assets per share, gearing or earnings per share of the group.
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