Issue 39

Axiata’s tower arm in talks for acquisitions over next 12 months

Malaysian telecoms firm Axiata Group Bhd’s tower unit is working on acquisition deals which it aims to complete in the next 12 months, the company’s chief executive officer said. 

Suresh Sidhu, chief executive officer of edotco Group Sdn Bhd, told Reuters on Friday he was optimistic that two to three deals could materialise in the company’s existing markets where the sector has developed. 

edotco, 62.4-percent owned by Axiata, currently operates and manages a regional portfolio of more than 28,000 towers in Malaysia, Myanmar, Bangladesh, Cambodia, Sri Lanka and Pakistan. 

“The priority is to look at the current footprint we are in and look for opportunities to bulk up and add more towers there,” he told Reuters, “Again, Malaysia, Myanmar, Bangladesh are countries of higher interest to us.” 

On Tuesday, the telecommunications infrastructure company cancelled a $940 million deal to acquire 13,000 towers from a unit of Pakistan Mobile Communications Ltd (PMCL) as regulators failed to provide all approvals for the transaction to go through. 

The deal, in works for more than a year, was expected to propel the company to the eighth spot among largest independent tower firms globally. 

Sidhu was unfazed by the deal being scrapped, noting that the other deals combined, if sealed, could provide a similar quantum of growth. 

Sidhu said there was no urgency to raise funds to fuel acquisitions, as the company still has $200 million in cash reserves from the $700 million it raised in 2016 and last year from shareholders. 

He said had the Pakistani deal transacted, it would have depleted edotco’s cash and sped up fundraising needs, whether through equity or debt, for future growth. 

However, any fundraising exercise would probably be put off until mid-2019, he said. “The deal pipeline is healthy and we have the luxury of making sure we do deals that we want to not for the purpose of pleasing the capital markets,” Sidhu said, noting that edotco has sufficient organic growth to sustain itself. 

Sources had said edotco’s plan to raise at least $500 million in an initial public offering targeted for the end of this year or early 2019 could be scaled back or delayed after the Pakistani deal was called off. 

edotco was also looking at Thailand, Laos, Vietnam and the Philippines as potential markets to enter.

  From – Deal Street Asia

India’s Ola in funding talks with Naspers at a valuation of $7-8b

South African internet conglomerate Naspers LLC is in talks to invest in ANI Technologies Pvt. Ltd, which owns ride hailing company Ola, at a valuation of $7-8 billion, said three people familiar with the development. 

Besides Naspers, Ola is also in talks with Singapore’s Temasek Holdings Pvt. Ltd and two other funds to raise $1 billion in fresh capital, the people cited above said, requesting anonymity. 

Ola, which is currently valued at about $4 billion, may see its valuation double after the proposed funding round, they said, adding the talks haven’t reached the final stages. Last October, Ola had raised $1.1 billion from SoftBank Group Corp. and Tencent Holdings Ltd, among others. It had announced back then that it would raise $1 billion more. 

However, the company’s proposed funding has faced hurdles over concerns related to a boardroom battle between Ola chief executive Bhavish Aggarwal and SoftBank and Tiger Global, the people cited above said. Aggarwal had blocked a proposed sale of shares by Tiger Global to SoftBank late last year in order to stop the Japanese investor from raising its stake. 

Potential investors are wary of backing a company that has had differences with SoftBank, the most powerful investor in the tech world, the people added. Temasek’s discussions with Ola was reported by Mint and other publications. The Singaporean investor is already in the process of becoming a shareholder in Ola through a secondary deal worth over $200 million. Once that deal is completed, Temasek will invest primary capital in Ola at a much higher valuation, the people mentioned above said. “Temasek has decided to complete the secondary share purchase first, before finalizing the terms of the primary investment. Usually both primary and secondary transactions happen simultaneously, but in this case, they want to negotiate the primary transaction at a higher valuation only after existing shareholders have sold their stakes in the secondary deal,” said one of the people cited above. 

Ola and Naspers did not respond to a request for comment. 

The latest funding talks come at a time when Ola is attempting to shore up its core cab-hailing business in India against arch-rival Uber Technologies Inc. As part of its plans, it is looking to aggressively expand its footprint abroad and within India, besides building a strong food-tech business to compete with the likes of Swiggy (Bundl Technologies Pvt. Ltd) and Zomato (Zomato Media Pvt. Ltd). 

Over the past one year, Ola has attempted to build separate businesses to boost its valuation. The company is expanding its food business Foodpanda to win market share. Its is also trying to expand its electric vehicles unit and payments business, besides eyeing international markets including Australia and New Zealand. 

Earlier in September, Ola had raised $50 million at a valuation of $4.3 billion from Hong Kong-based Sailing Capital and the China-Eurasian Economic Cooperation Fund, as part of the $1 billion round. Since starting out in 2011, Ola has raised over $2.5 billion. For Ola, it is imperative to keep a large war chest ready to fight Uber. The company also needs to attract new investors if it wants to avoid raising more capital from SoftBank.

From – Deal Street Asia

Amazon to invest $944m to launch cloud computing services in Indonesia

US-based e-commerce giant Amazon plans to invest Rp 14 trillion ($944 million) in Indonesia to launch its cloud computing arm, Amazon Web Services (AWS), into the country, according to Finance Minister Sri Mulyani Indrawati. 

Speaking to local reporters recently, Indrawati said the plan had been conveyed by Amazon vice-president Werner Vogels to Indonesia president Joko Widodo on two occasions. 

“Amazon met with (Indonesian President) Joko Widodo both in Hanoi and again today and conveyed its interest in Indonesia,” Indrawati said, as quoted by local media. 

The investment, she added, will be spread over a 10-year period. 

Following the talks with Amazon, President Widodo has asked Indrawati’s ministry to set up incentives to support the planned investment. 

The minister, meanwhile, had earlier also said that she would make sure Amazon was willing to comply with the country’s tax and regulations. 

By rolling out a cloud computing business in Southeast Asia’s largest market, Amazon will go head to head with its global rival Alibaba whose cloud computing arm, Alibaba Cloud, launched a data centre in Indonesia in March. 

The Alibaba data centre, which is the first global public cloud platform in the country, will offer a comprehensive suite of cloud products and services ranging from elastic computing, database service, networking, security and middleware to analytics and big data. 

Should Amazon later decide to introduce its core business of e-commerce, Alibaba would again be the one to beat. The Chinese internet giant is the main backer of Indonesian e-commerce unicorn Tokopedia. 

Other foreign powers in the Indonesian e-commerce space include China’s Tencent, which holds a 36 per cent stake in New York-listed Sea Ltd., the owner of e-commerce firm Shopee Indonesia; and Chinese e-commerce company, which has its own subsidiary in the country.

From – Deal Street Asia

Hillhouse tops $10B for record Asia private equity fund
Hillhouse Capital has become the first private equity firm in the world to raise more than $10 billion for a fund in Asia, racking up $10.6 billion in commitments for its fourth flagship effort. 

That continues a frenetic stretch of fundraising in Asia for firms of all stripes, with a series of mega-funds emerging on the continent from investors based all over the world. Four different firms have ever raised at least $6 billion for vehicles in the region, and all four of those vehicles were closed in either 2017 or 2018, per PitchBook data.  

Hillhouse seizes the crown from KKR, which raised $9 billion for its third Asia fund last year. Here's a rundown of the rest of the 10 biggest Asia buyout funds ever:

As you can see, Hillhouse's latest effort is more than twice the size of its predecessor, which closed on $4.2 billion a mere two years ago. Founded in 2005 by Zhang Lei, who previously worked at the Yale Endowment, the firm pursues investments at all equity stages and a range of sectors, including consumer, tech, industrials and healthcare. Hillhouse has invested in a who's who of Chinese tech companies, including Baidu, Tencent and

About a month ago, the firm attempted to coordinate a reported $17.6 billion buyout of Yum China, which owns the rights to the KFC, Pizza Hut and Taco Bell brands in China. The Hillhouse-led consortium also included KKR, uniting two of the region's most powerful fundraisers. But the deal was ultimately rejected, with Yum China opting to stay public.

A handful of other enormous funds in Asia are believed to be in the works. Reports emerged in July that CVC Capital Partners had set a $4 billion target for a new vehicle in the region, while Bain Capital is believed to be seeking multiple billions for its latest effort. Baring Private Equity Asia, meanwhile, reportedly conducted a $4.5 billion first close for its seventh fund in July.

From – PitchBook

IVL to seal $1b deals soon; Huawei investing $21.6m in cloud service

Indorama Ventures Pcl expects to close three deals worth around $1 billion by this year end. Meanwhile, Huawei Technologies Thailand makes the first move to invest and offer public cloud services in Thailand.
IVL to seal $1b deals soon 
Thai-listed petrochemical firm Indorama Ventures Pcl (IVL) is working on three acquisitions, which are expected to be completed in this quarter, with a combined value of $1 billion. 

According to a Bangkok Post report, IVL will fund these three deals, including Medco Plast for Packing and Packaging Systems SAE in Egypt, Kordarna Plus in Czech Republic and Dupont Teijin Films, with its internal cash flow.

CEO Aloke Lohia told media that it will recognize revenue from these acquisitions next year. In March, IVL formed an equal joint venture, named Corpus Christi Polymers LLC, with Alpek SAB de CV and Far Eastern Investment Holding to purchase the plant along with intellectual property and utility assets from M&G. The deal is in progress, he added.

Huawei investing $21.6m in cloud service 
Huawei Technologies Thailand is investing 700 million baht ($21.6 million) in local public cloud services in Thailand and is scheduled to launch the service by this month end. 

The company’s cloud-based data centre is located in Amata Nakorn City in the Eastern Economic Corridor. Among the global cloud service providers such as Alibaba, Microsoft and Google, Huawei is the first mover to set up the data centre in Thailand. 

It told the local media that the public cloud services in Thailand will also serve other countries in Southeast Asia, except Singapore. The main target customers include enterprises, government’s agencies and mobile operators.

From – Deal Street Asia
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