September 22, 2018 / 12:56 AM / a year ago

CORRECTED-Malaysia's Axiata in talks for acquisitions over next 12 months

(Removes reference to acquisitions value in headline and lede)

* Tower unit targets to seal 2-3 deals in next 12 months

* Deals could make up for growth lost from scrapped Pakistani deal

* Deals in Malaysia, Myanmar and Bangladesh are of higher interest

* Fundraising needs not urgent, probably in mid-2019

By Liz Lee

KUALA LUMPUR, Sept 22 (Reuters) - 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.

Reporting by Liz Lee; Editing by Diane Craft

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