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Axiata and edotco Upsizes 2016 Tower Sector Record Equity Private Placement Deal to USD700 million

Dato' Wan Kamaruzaman (CEO, KWAP) and Suresh Sidhu (CEO, edotco Group) signing the subscription agreement, witnessed by Nik Amlizan Mohamed and Tan Sri Jamaludin Ibrahim.

Axiata and edotco Upsizes 2016 Tower Sector Record Equity Private Placement Deal to USD700 million with KWAP as New Investor 
Kuala Lumpur, 18 April 2017 – Axiata Group Berhad (“Axiata”) and its subsidiary, edotco Group Sdn. Bhd. (“edotco” or “Company”) today announced an additional USD100 million upsize of its 2016 record tower sector equity private placement with Malaysia’s pension fund, Kumpulan Wang Persaraan (Diperbadankan) (“KWAP”) joining the fold of investors. The inclusion of KWAP brings edotco’s maiden equity private placement to USD700 million surpassing its initial announced placement size of USD600 million. 
Based on edotco’s portfolio at the close, final allocation of the private placement exercise stands at USD400 million to Innovation Network Corporation of Japan, USD100 million to KWAP in primary shares, and USD200 million to Khazanah Nasional Berhad in secondary shares. At completion, edotco’s shareholding results in the investors collectively owning 37.6% of edotco, with Axiata remaining as the majority shareholder at 62.4%. 
The enlarged placement of shares to KWAP is an extension of edotco’s equity private placement process announced in late December 2016 and was concluded on the same equity valuation of close to USD1.5 billion and an enterprise value to FY2016 EBITDA multiple of 12.5x, which is comparable to regional peers. 
As the second largest pension fund in Malaysia and one of the government’s key investment arm, KWAP seeks to generate optimum returns from its investments. Since the incorporation of KWAP in 2007, the fund recorded an average annual growth of 11.2%. Its growth was attributed to the contributions by the federal government, statutory bodies, and accumulation of investment income over the years. As of 31 December 2016, KWAP’s unaudited fund stood at RM124.78 billion. 
edotco is currently the 12th largest tower company globally with presence in Malaysia, Cambodia, Myanmar, Bangladesh, Sri Lanka and Pakistan and is continually assessing opportunities in existing and new markets for growth and expansion. The full proceeds from the placement process will allow edotco to undertake value accretive opportunities as they arise.
Suresh Sidhu, CEO of edotco said, “The upsize of USD100 million and the structure of the offering marks another achievement in our maiden private placement exercise. edotco now has the advantage of funding flexibility as well as the balance sheet capacity to continue to grow the business confidently and capitalise on potential acquisition opportunities.” 
Tan Sri Jamaludin Ibrahim, President & Group Chief Executive Officer of Axiata added, “It is an honour for us to welcome KWAP as a new shareholder to edotco. As an existing longstanding investor in Axiata, KWAP’s take up of this placement not only validates our long-term growth strategy but also of edotco’s strong business fundamentals, its exceptional long-term prospects and experienced management team. We thank KWAP for placing their trust in both Axiata and edotco.” 
Commenting on the investment, Dato’ Wan Kamaruzaman bin Wan Ahmad, CEO of KWAP said, “We have been very impressed by edotco’s rapid growth in the past five years, and would like to be part of its growth journey, towards becoming one of the leading tower players globally by 2020. Domestic private equity has been an area of growth and on a trajectory to provide attractive investment income to the fund in recent years, and we would like to continue building our portfolio in this area. The target is to allocate 3% of our assets in private equity by 2020.” 
J.P. Morgan is the Sole Placement Agent in this transaction. 

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