Maxis mulls options to raise up to RM4.5b

Thursday June 17, 2010




KUALA LUMPUR: Maxis Bhd is preparing to raise as much as RM4.5bil to upgrade its network and pay back debt, chief financial officer Rossana Rashidi said.



The carrier, controlled by billionaire T. Ananda Krishnan, was in talks with bankers to weigh options that included the company’s first sale of bonds, Rossana said in an interview on Tuesday. Maxis may raise the funds in the next three to six months, she said.





Rossana Rashidi

The company plans to invest RM1.4bil on its mobile phone and broadband networks this year as revenue from voice calls shrinks. Analysts estimate Maxis’s profit will climb to RM2.46bil this year, fuelled by demand for wireless Internet access.



“They need to raise long-term money to be used for capital expenditure and a combination of other things,” said Jeffrey Tan, an analyst at OSK Research Sdn Bhd.



“Perhaps a special dividend is one of them.” OSK has a “neutral” rating on Maxis and a share price estimate of RM5.80.



Maxis closed down one sen to RM5.30 yesterday.



The company would use RM2.5bil of the proceeds to repay a bridging loan and the rest for capital expenditure, Rossana said. Maxis’ initial public offering raised RM11.2bil for the parent in November.



Maxis has a net debt-to-equity ratio of 43%, compared with 17% for Advanced Info Service Pcl of Thailand, 57% for Philippine Long Distance Telephone Co and 124% for Indonesia’s PT Indosat, according to Bloomberg data.



Maxis and its parent, Maxis Communications Bhd, don’t have debt ratings. Binariang GSM Sdn Bhd, which owns a controlling stake in Maxis Communications, is rated AA3 by Rating Agency Malaysia Bhd.



The mobile phone operator was exploring both Islamic and conventional financing, Rossana said. It was also considering whether to use ringgit or dollars, she said.



The company had RM8.32bil in liabilities as at March 31, according to data compiled by Bloomberg.



Profit is poised to climb 56% to RM2.46bil this year, according to the average of 26 analyst estimates compiled by Bloomberg. The company, which has more than 12.6 million subscribers, posted profit of RM552mil last quarter.



Maxis wanted to expand its third-generation network to reach 80% of Malaysia’s population by the year-end, it said in Tuesday’s statement.



“Clearly, there’s a lot of pressure on voice,” chief executive officer Sandip Das said in an interview. “The next revenue is going to come from underserved geography, data and broadband. That’s where the company is investing big time.” — Bloomberg

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