Singapore-Listed Yoma Strategic has sold a 12.5 percent stake in telecom tower-owner Edotco Investments Singpore to Malaysian Axiata Group for US$35 million.
Yoma had held 25pc of Edotco Investments Singapore with a put option to sell the stake to Malaysian telecoms firm Axiata under an agreement signed in December 2015.
Edotco Investments Singapore owns Myanmar Towner Company (MTC), now known as Edotco Myanmar, which counts Oordeoo as a primary customer.
The call agreement was made in conjunction with the Malaysian telcommunication firm’s acquisition of 75pc of MTC last year.
“Our original investment of $20 million has now grown to $70 million, of which half is being sold,” said Yoma CEO Melvyn Pun. The firm has benefited from a fair value gain as its investment increased in value, he said, and wanted to realise some of those gains through a share sale.
But Yoma remains committed to building out the telecom business, he added.
Axiata’s purchase of the shares takes its stake in Edotco Investments Singapore to 82.5pc. The $35 million sale price was based on a formula set out in the original put agreement and included an agreed premium based on “certain variations to the terms of existing agreements”, Yoma Strategic said.
Under the original agreement, Yoma could sell its 25pc stake to the Axiata at the higher of two prices: either $40.25 million – based on a valuation made last year – or a future figure based on a multiple of earnings before interest, taxes, depreciation and amortisation, or EBITDA, between 9.80x and 12.40x and MTC’s trailing 12-month actual performance.
Yoma and Edotco have also agreed to terminate this agreement following the 12.5pc sale, and sign a revised shareholders agreement setting out new terms. The base price for a potential sale of Yoma’s remaining 12.5pc will be $35 million, according to Yoma.