Axiata sells its Ncell Shares to Spectrlite UK for $50 Million

Last Updated on February 4, 2024

MAJOR BREAKING NEWS! Axiata Group’s shares in Ncell have been sold to a UK-based company Spectrlite UK Ltd. for a fixed consideration of $50 million. The company bought the Malaysian telco giant’s 80% shares in Ncell which paves the way for its swift exit from Nepal.

Earlier, Axiata Group Bhd had announced its plan to sell its shares and exit from Ncell. The growing business challenges were cited as the primary reason for quitting its Nepal business.

Spectrlite UK is a recently established company and has investments of the Acharya brothers- Satishlal Acharya and Sachinlal Acharya. If you were no aware, they also have an investment in Sunivera Capital Venture Pvt. Ltd. which currently owns 20% shares in Ncell.

London-registered Spectrlite UK buys Axiata’s 80% stakes in Ncell for a fixed consideration of $50 million

In 2015, Axiata acquired Ncell from TeliaSonera in a billion-dollar deal. Then, the Malaysian group bought Reynolds Holdings for $1.37 billion which earned it the now-sold 80% shares in Ncell. In Nepali currency, that stood at a whopping total of Rs 1.36 trillion as per the then exchange rate. That was the exit for TeliaSonera from Ncell.

Axiata confirms the deal, cites challenging environment for its exit

Axiata has confirmed its deal with Spectrlite UK. The company said that it “entered into an unconditional sale and purchase agreement with Spectrlite UK Limited (“Purchaser”) for the sale of Reynolds Holding Limited which owns approximately 80% equity stake in Ncell Axiata Limited.”

At the same time, the group pointed out the reasons for leaving its Nepal unit. Axiata said, “The Group’s decision to withdraw from Nepal is based on a thorough evaluation of the prevailing business environment in Nepal, which led to the conclusion that continuing operations under the current conditions of unfair taxation and regulatory uncertainties was no longer sustainable for Axiata.”

After announcing the deal, Vivek Sood, Group Chief Executive Officer and Managing Director of Axiata said, “Axiata has been in Nepal for seven years, working alongside hard-working colleagues in Ncell. However, the increasing challenges in the operating environment represent a fundamental shift, he continued, “Our foray in Nepal cannot continue due to the unfavorable conditions for Axiata, the uncertain regulatory and tax environment, and the looming risks associated with the expiry of the mobile license in 2029.”

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Spectrlite UK and Ncell CEO statement over the purchase

Ncell has also confirmed the news of the purchase and said that Spectrelite will acquire a 100% stake in Reynolds Holdings which translates to 80% ownership in Ncell. It said, “Spectrlite is committed to driving Ncell forward, expanding the range of services, enhancing quality, and introducing digital innovations.”

Likewise, Spectrelite UK owner Satish Lal Acharya said that the company will be committed to further innovation and investments and provide life-enhancing services to the customers. He said, “Spectrlite is pleased to announce an agreement for the acquisition of a controlling shareholding in Ncell. I will be drawing upon my extensive experience in the telecommunications industry and shall be working with the management of Ncell to drive innovations, investments, and a wide range of life-enhancing services to the Nepalese people.”

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Ncell CEO Jabbor Kayumov expresses new hope

In the meantime, Ncell CEO and MD Jabbor Kayumov has expressed his hope that the Spctre and Axiata deal would enrich the hope for better services in the coming days for the people. “Ncell is pleased with the upcoming change in ownership and eagerly anticipates collaborating with new shareholders to elevate Ncell into a world-class Nepali-driven data and communications hub,” he continued, “In the foreseeable future, Ncell will unveil its refined plans that underscore the substantial prospects for expanding Ncell’s service offerings.” He maintained that this “evolution” aims to uphold Ncell’s leading position in Nepal’s telecommunication industry for its digital and internet services.

Spectrlite buys Axiata stakes in Ncell for $50 million

Spectrlite will need to pay Axiata around Rs 67 crore out of Rs 6.67 billion within the next 6 months. The due amount will need to be paid within the next 4 years. Currently, the company hasn’t revealed much about the financial details yet.

This has effectively ended the speculations that Chaudhary Group would buy Axiata’s stakes in the private telco. Just after Axiata announced its Ncell exit plan, the Nepali conglomerate was said to be the frontrunner in taking over the private telecom company. But that couldn’t materialize.

But there is another development coming in. As Axiata found its buyer, it may find some procedural blocks. It has emerged that the private telco hasn’t got approval for reselling its stakes. Telecom regulator Nepal Telecommunication Authority (NTA) wrote a letter to Ncell that the shareholders first must obtain approval before they could buy, sell, or transfer the ownership. This might delay or complicate Axiata’s selling of Ncell shares to Spectrlite.

Ncell was Axiata Group’s telecom business in Nepal. The group operates its telecommunication services in Malaysia, Indonesia, Sri Lanka, Bangladesh, Cambodia, Myanmar, Pakistan, Laos, and the Philippines

We are closely following the latest developments on this breaking news. Keep reading Nepalitelecom.com for comprehensive Ncell share purchase news.