3 May 2023 12:15 am Views - 275
Dialog Axiata PLC and its Malaysian parent Axiata Group Berhad and India’s Bharti Airtel Limited have entered into a binding term sheet to combine operations of Bharti Airtel Lanka, Airtel’s wholly-owned subsidiary, with Dialog Axiata.
According to a stock market filing by Dialog, the proposed transaction envisages Airtel being granted a stake in Dialog, representing the fair value of Airtel Lanka.
Airtel would accordingly be issued new shares in Dialog Axiata upon completion of the transaction.
“Discussions with respect to the proposed transaction are ongoing between the parties and also with the relevant regulatory authorities as per applicable laws and regulations,” Dialog Axiata Director/CEO Supun Weerasinghe said.
“The proposed transaction is subject to signing of definitive agreements and necessary closing conditions including applicable regulatory and shareholder approvals,” he added.
Dialog Axiata is the leader in Sri Lanka’s mobile telephony space with over 17 million subscribers.
Airtel Sri Lanka commenced commercial operations of services in Sri Lanka in 2009 and was the fastest operator to reach 1 million customers. Today, Airtel has established its state-of-the-art 5G-ready 4G network across all parts of Sri Lanka.
According to market sources, Airtel is said to be having about 12 percent market share and has a very strong presence in the Northern and Eastern Provinces of the country.
Fitch Ratings in a number of occasion had predicted that Airtel Lanka will seek a merger or be acquired by rivals given the overwhelming capex requirement to stay competitive in the market.
If the arrangement goes through, Sri Lanka will end up having only three mobile telephony services providers, Dialog, Mobitel—a unit of Sri Lanka Telecom PLC— and Hutch, which acquired Etisalat’s operatioins in 2018.
Meanwhile, speculation is rife that Bharti Airtel will make bid for Sri Lanka Telecom PLC (SLT) as the government is preparing to divest 49 percent stake held by the Treasury Secretary in SLT.