Kuala Lumpur-based Axiata Group, through indirect wholly-owned subsidiary Axiata Investments (Indonesia, AIISB), is selling a 5% stake in its Indonesian operator XL Axiata to Ferrymount Investments Ltd (FIL) for IDR1.44 trillion (USD101 million). According to the parent company, AIISB entered into a sale and purchase agreement (SPA) with FIL, Procap Partners and Tiga Investments Pte on 27 September 2021 for the disposal of 533.41 million shares in XL Axiata. AIISB currently holds a 66.25% stake in the operator. ‘The disposal facilitates the timely introduction of Indonesia-focused investors in XL who acknowledge the value and opportunities in the domestic telecommunications sector,’ Axiata said in the filing. In conjunction with the disposal, FIL granted AIISB a limited term call option (1 January 2022 to 30 June 2022) dependent on the performance of XL’s shares.
FIL is a company incorporated under the laws of the British Virgin Islands. Procap Partners and George Raymond Zage III indirectly hold two-thirds and one-third of the issued and outstanding share capital of FIL respectively. Procap and Tiga Investments, acting as guarantors, will guarantee the discharge by the buyer of its obligations under the SPA. ‘Axiata is of the view that the disposal, which provides XL with access to the aforesaid business partnerships of Procap and Tiga Investments, among others, will place XL in a better operational footing in the near future’. Procap is also incorporated in the British Virgin Islands, with investments in various technology-focused companies based in Indonesia and Southeast Asia, including Provident Growth Fund (a private equity growth fund focused on technology investments in Southeast Asia) and GoTo Group, a ‘super app’ created from the merger of two prominent Indonesian groups, namely Gojek (Indonesia’s largest online ride-hailing, food delivery and digital payment platform) and Tokopedia (Indonesia’s leading e-commerce platform).
The exercise is expected to be completed in October 2021.