TEXT-S&PBulletin: Axiata rating unaffected by Latelz acquisition
(The following statement was released by the rating agency)
Dec 14 - Standard & Poor's Ratings Services said today that its rating and outlook on Axiata Group Bhd. (BBB/Positive/--; axA+/--) are not affected by the company's acquisition of Latelz Co. Ltd. (not rated). We do not expect the acquisition to significantly affect Axiata's operating and financial performances. Latelz is Cambodia's second-largest wireless company in terms of subscribers.
We anticipate that the acquisition will strengthen Axiata's competitive position in the Cambodian telecom market by making the company the second-largest player with a market share of about 35%; currently, Axiata is the fourth biggest. We also believe the acquisition will bring in significant cost synergies. Nevertheless, its overall impact on Axiata's operating performance will be limited because the combined entity will contribute less than 2% of the company's consolidated EBITDA.
In our opinion, the acquisition will not materially impact Axiata's financial metrics. We expect the company's debt-to-EBITDA ratio to remain strong for the rating at less than 1.3x after factoring in a purchase price of US$155 million and marginal debt at Latelz. Axiata expects to complete the acquisition by March 2013.