INCJ, Khazanah invest $600m in Malaysian telecom player

The transaction includes commitments of $400 million from INCJ and $200 million from Khazanah. INCJ and Khazanah will acquire primary and secondary shares in the privately held company, respectively.

Axiata, a diversified communications group operating across 10 Asian countries, will remain the company's majority shareholder. The deal represents Edotco's first equity raising and is considered the largest telecom tower private placement of the year.

"We see a perfect fit with our new shareholders, INCJ and Khazanah," Suresh Sidhu, CEO of Edotco, said in a statement. "The additional capital injection will provide Edotco the capacity to execute its growth strategies including expansion within Asia via key acquisitions and further in-country organic opportunities."

Expansion efforts will also include the construction of new towers and the introduction of advanced energy management technology. Potential for growth is seen as particularly high in South and Southeast Asia due to high adoption rates for communication services and the level of market maturity.

Founded as Asia's first regional tower company in 2012, Edotco currently operates across Malaysia, Cambodia, Myanmar, Sri Lanka, and Bangladesh. It claims a portfolio of more than 25,000 operated and managed towers. Operations include tower leasing, co-location, build-to-suit, energy, transmission and maintenance services.

In a separate statement, INCJ said it intended to leverage its involvement in the company's existing business to gain expertise in telecom infrastructure sharing and promote Japanese companies' participation in the sector. This strategy is expected to include future support for Japanese technology and energy management companies that are seeking to expand into South and Southeast Asia.

The market for telecom infrastructure sharing, in which multiple carriers rent towers, is growing in both developing and advanced economies as mobile data traffic surges and carriers try to improve efficiency. Recent PE investment in this space includes Brookfield Asset Management agreeing to acquire the tower assets of Reliance Communications for INR110 billion ($1.6 billion).

Earlier this year Apollo Towers Myanmar - a joint venture between TPG Capital's growth unit, Tillman Global Holdings and London-listed investment group Myanmar Investments International - tapped a $250 million loan backed by the US government.

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• Topics
• Southeast Asia
• Infrastructure
• Media
• Support services
• Expansion
• Malaysia
• Japan
• Innovation Network Corp. of Japan (INCJ)
• Khazanah Nasional