Issue 19

Telenor, Axiata in talks to combine telecom operations in Asia

Norway’s Telenor ASA and Axiata Group Bhd., Malaysia’s biggest wireless carrier, are in talks to combine their Asian telecommunication operations in a “mega merger of equals” to create a company with 300 million customers in nine countries. 

The proposed transaction will form an entity with sales of about $13 billion and earnings of about $5.5 billion. Potential savings, or “synergies,” from the deal would amount to about $5 billion, according to Telenor. 

Telenor shares rose almost 5 percent in early trading in Oslo. “We aim to create a leading and well-diversified pan-Asian telecom and infrastructure company with substantial synergy potential and strong regional operations,” said Gunn Waersted, the chair of Telenor. 

The transaction would provide a stronger foothold for both companies, which have recently seen their ambitions checked in Asia. The combination would be the largest mobile operator in Malaysia, with the merger of Celcom Axiata Bhd. and Telenor’s Digi.Com Bhd., and potentially form a global top five mobile infrastructure company. 

Telenor also operates in Thailand, Bangladesh, Pakistan and Myanmar, while Axiata has business in Cambodia, Nepal, Sri Lanka and Indonesia. Axiata’s mobile operations in Bangladesh, Robi, aren’t part of the deal. Based on the equity value, Telenor would own 56.5 percent of the new company and Axiata the remainder. 

A final agreement is sought by the third quarter, but the companies said that there’s no certainty that the discussions will result in an accord. They would aim to eventually list the company on an international exchange and in Malaysia. 

The deal would continue a transformation for Telenor, which has sold its eastern European businesses and purchased a mobile operator in Finland to focus more on its Nordic home region. Telenor in 2017 sold its unit in India after years of tough competition. Axiata has seen similar troubles, having to exit Singapore and seeing an expansion in Pakistan checked.


From – Deal Street Asia


ASX-listed Blackstone Minerals to acquire Vietnam-based nickel mine

Australia-listed Blackstone Minerals has agreed to acquire a 90 per cent stake in Vietnam-based Ta Khoa Nickel Project from Canadian investor AMR Nickel Limited. 

The Australian firm has entered into a 12-month option period that will see Blackstone Minerals settle quarterly payments of $100,000 and exercise of the option by issuing A$1 million of ordinary fully paid shares. 

Located 160 kilometres west of Hanoi, the project includes the Ban Phuc nickel mine which is currently under maintenance. The location is near the new northern manufacturing hub, Hai Phong, where LG Chem and Vietnamese automaker VinFast have set up their factories. Blackstone Minerals said AMR Nickel had invested more than $136 million in Ta Khoa and generated $213 million in revenue during a 3.5-year period of falling nickel prices. 

The resources mining firm, which operates the BC Cobalt Project in western Canada, said the Ta Khoa acquisition will substantially enhance its battery mineral focused asset base, and it will investigate the potential to develop downstream processing infrastructure in Vietnam to cater to Asia’s growing lithium-ion battery industry. 

“This is an exciting opportunity for Blackstone to acquire a 90 per cent interest in a project that has a history of profitable nickel production even during low nickel prices. Blackstone will be the first company to explore Ta Khoa for both massive sulfide vein and disseminated sulfide nickel sulfide deposits,” commented Scott Williamson, the firm’s managing director. 

The Vietnamese government has recently lifted some obstacles for overseas companies to invest in its mining industry, reducing the mining licence grant fee for new nickel mines by half, announcing a new-generation foreign direct investment orientation strategy until 2030, and committing to eliminating existing export taxes. 

The Ban Phuc Nickel mine was specifically identified as a project of national significance, Blackstone said.

From – Deal Street Asia

Bangkok Airways, Lotte tie up for duty-free contracts in four airports

Bangkok Airways has entered into a partnership with South Korea’s Lotte to bid for concessions to operate duty-free space at Bangkok’s Suvarnabhumi Airport and three regional airports in Chiang Mai, Hat Yai and Phuket airports. 

Both companies will form a 50:50 joint venture, according to local media reports. Bangkok Airways president Puttipong Prasarttong-Osoth was quoted saying that the joint venture with Lotte has increased the possibility for the Thai airline to win the concession as Lotte is recognised as a global brand and is experienced in running the duty-free at South Korea’s Incheon airport. 

Apart from Bangkok Airways, there are four other companies that bought bid envelopes from the Airports of Thailand. 

They are Central Group, partnering with Duty Free Singapore, Minor International, joining forces with the group of restaurants in duty free, the former operator King Power Duty Free, and Royal Orchid Sheraton Thailand. Currently, around 60 per cent of Bangkok Airways are generated from the airline business. 

However, it is trying to diversify into other businesses that can help it grow sustainably in the long term. “The airline business is facing a very fierce competition and gaining less profit over the past three to four years. 

Therefore, we consider duty free business will give us the better profit and sustain our income in the long run,” said Puttipong, as quoted by the local media. 

Earlier, it also set up a consortium with BTS Group and Sino-Thai Engineering & Construction to vie for the management concession of U-Tapao airport and the Eastern City Development Project with an operator of Japan’s Narita airport. This concession requires an estimated investment cost up to 100 billion baht over the first 10 years.

From – Deal Street Asia

GOJEK, Allianz X back Africa-based ride-hailing firm SafeBoda

Indonesia’s ride-hailing firm GOJEK and Allianz X, the digital investment arm of global insurance group Allianz, have co-invested in an unspecified Series B funding round for Uganda-based ride-hailing firm SafeBoda. 

GOJEK made the investment through its venture capital arm Go-Ventures, per an Allianz X statement. The Indonesian firm has previously backed Bangladeshi ride-hailing app Pathao and is expected to re-up in the latter’s ongoing Series B funding round. 

Launched in July last year, Kampala-headquartered SafeBoda offers on-demand ride-hailing services in Uganda and Kenya. In addition, it offers various on-demand consumer and payment services. It has previously received a convertible note investment from London-headquartered Global Innovation Fund. It was also rumoured to have raised $1.1 million in funding last year although the company has never confirmed this. 

‘Boda bodas’ is the term used in East Africa for motorcycle taxis. These are the main form of public transport in Uganda and Kenya. SafeBoda was co-founded by a Ugandan bike-taxi driver and two European economists. 

It competes with Taxify Boda, Savvy Riders, Juu Boda and Uber in Kenya. At home, its rivals include Uber, Taxify Boda, Dial Jack (only bikes), Little Ride (cars) and Mondo Ride (cars and bikes). 

“Our investment in SafeBoda underlines our continued commitment to growth markets. We are excited to participate in the development of ride-hailing ecosystems in Africa,” said Oliver Ullrich, Corporate Development Director at Allianz X, in a statement. The deal marks the first investment in Africa for Allianz X. 

Allianz X is an existing GOJEK investor. Last year, it announced an investment of $35 million in the Indonesian firm, marking its first deal in Southeast Asia. Its parent company Allianz has partnered with GOJEK to provide insurance for its driver partners in Indonesia. 

Go-Ventures had recently co-led a $35.5-million Series A round for Indian mobile eSports gaming platform Mobile Premier League. Other known investments include digital TV startup Narasi TV and media startup Kumparan, both in Indonesia. 

Go-Ventures has preferred to keep a low profile in contrast to rival Grab’s VC arm Grab Ventures, which announced a $250-million allocation for investments in Indonesia, GOJEK’s home market, last year. 

DEALSTREETASIA had previously reported that unlike Grab Ventures, which invests off of Grab’s balance sheet, Go-Ventures plans to tap external pools of capital. 

With its parent company as its anchor investor, it is learnt to be raising a total of $180 million. It is helmed by Aditya Kumar, a former SoftBank and Openspace Ventures executive, who is the firm’s vice president of investments.

From – Deal Street Asia

SG’s creative AI platform Pencil raises $1.1m in Wavemaker-led seed round

Pencil, a Singapore-based creative AI company, has raised $1.1 million (S$1.5 million) in a seed funding round led by Wavemaker Partners. 

The other investors joining the round include SGInnovate and Entrepreneur First. NUS associate professor Min-Yen Kan and members of Xoogler Angels also joined as Pencil’s investor-advisors. Xoogler Angels is an angel network of Google executives in Southeast Asia. 

According to a statement, the funds will be used to expand engineering and customer success teams, grow proprietary datasets and extend its patent-pending technology. 

Pencil also announced the launch of its first enterprise product, a creative platform for advertisers called Studio. Studio, the company said, will help creative and media teams generate personalised advertising content at speed and scale. 

Will Hanschell, co-founder and CEO of Pencil, said: “We believe that AI will be as fundamental to creativity in the future as the pencil was in the past. Our goal is to bring the scale and speed of automation to creativity, without killing it. We’re working towards a world where humans and machines collaborate on ideas of all kinds, together pushing the boundaries of what creativity even means.” 

Pencil’s clients include Sephora SEA, POND’S and Mindshare. According to the company, early results indicate a 2x improvement in advertising performance and a 10x reduction in time and cost with its technology. “The number one pain point of marketing teams is increasing their ROI,” said Paul Santos, Managing Partner of Wavemaker Partners. 

“Almost every solution in the market proposes doing so through greater targeting or better customer profiling…Pencil takes a new and complementary approach, allowing teams to generate and distribute personalised content at scale using AI.” 

Founded in March 2018, Pencil is led by Hanschell and Sumukh Avadhani. Hanschell is a former partner and management consultant at creative agency Iris Worldwide, while Avadhani is a former principal at Google and deep learning and computer vision specialist.

From – Deal Street Asia
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