Friday, November 20, 2009

Regarding Aircel and Maxis


30th April 2007:
How Much For Maxis?

  • Recently there was an article on Star Bix, New chapter at Maxis.
    This line is most interesting.

    To grow in India, Indonesia and locally in broadband and 3G, the funding requirements are huge, but that is not really an issue, said Jamaludin. This year alone, the company needs RM2.77bil (of which RM1.57bil is for India and RM1.2bil for Malaysia) and in India alone..
And as argued ..

  • If you are a current shareholder of Maxis, your share of this 2.725 Billion has already being invested in India and Indonesia by Maxis.

    How? Should there be a value placed on these investments?

May 1st 2007: Maxis Again

  • Proposal to take Maxis private

    “Yes, we are shocked with the takeover plan but it does make a lot of sense to take it private, given that the current major shareholders see huge value in Maxis that the market does not. Maxis’ India unit, Aircel Inc, for one is a brilliant asset and the market is not valuing it,” an analyst said.
I was shocked. What about the minority shareholders interests? For sure the current major shareholders saw a huge value at Maxis. Hence the privatisation!

  • “Taking Maxis private also allows the major shareholders to restructure it without having to deal with the minority shareholders. That gives them the flexibility of doing what they need to do with the group and some private equity investors may emerge to nurture the companies within Maxis.

    “At some point, we will not be surprised if Maxis makes its way back to the Malaysian bourse but it is expected to also have a dual listing somewhere on an international bourse and its units will also be listed separately,” he added.
Restructure because the major shareholders saw value, right?

And best of all by taking Maxis private, the major shareholders DOES NOT have to deal with the minority shareholders.

Anyway let's look at Aircel.

Here is the link to Maxis last quarterly announcement before it was taken private.
click here for the pdf file

Page 18.

Back then, in 2007, revenue increased by rm 53 million in just one quarter. Net additions of 1 million subscribers for just one quarter.

Now during Maxis got relisting exercise, on 29th Oct 2009, OSK wrote the following:

Given what had transpired in 2007, I was not shocked at all that the Maxis overseas operations are not included in the relisting.

Hmmm.... got me thinking.

Maxis had a nice overseas operation. Its Aircel unit was declared to be a BRILLIANT ASSET back in 2007 and the growth in revenue and subcribers shown by 2007 data proved so.

But I am surprised by the statement by OSK: " Maxis will be listed without its loss-making overseas operations." Loss making? Hmmm...

Anyway on today's Business Times:
  • Aircel to invest US$5.5b in India
    By Goh Thean EuPublished: 2009/11/20

    MOBILE phone firm Aircel Ltd, a sister company of Maxis, will spend US$5.5 billion (RM18.6 billion) over three to five years to expand its network and cover most parts of India.

    It already has US$3.5 billion (RM11.8 billion) in US dollar and Indian rupee loans. The rest will come from shareholders like Binariang GSM Sdn Bhd, which owns 74 per cent of Aircel.
    Binariang also owns stakes in Indonesia's PT Natrindo Telepon Selular and Maxis Communications Bhd.

    Countries like India and Indonesia are where growth will come from for Bina-riang. The group has just spun off Maxis Bhd in Malaysia, raising some US$3.3 billion (RM11.1 billion) in Southeast Asia's biggest initial public offering.

    "Aircel has really grown over the past few years, from a small company two years ago to the third most admired telecom brand. It is still growing at a healthy pace," said Aircel director Sandip Das, also the chief executive officer of Maxis Bhd, in an interview on Wednesday.

    Aircel now covers 18 circles in India and is expected to launch its services to all 23 circles by the middle of next year. In India, licences are given out for areas known as circles.

    "We are now adding one million new subscribers every month. We now have about 26 million subscribers," he said.

The last statement caught my attention!

  • "We are now adding one million new subscribers every month. We now have about 26 million subscribers,"


Aircel is now adding in ONE MILLION new subscribers every month!

Back in 2007, it was ONLY (what an understatement) doing 1 million per quarter!

And Aircel has 26 million subscribers.


Now this got me thinking.

Assume, yeah ass-u-me, that I am a Maxis fanboy, and despite what had happened before, I am now a Maxis shareholder again. (Ass-u-me lah! ). Yeah, assume I had the share before, share got delisted and now I buy back again to be a shareholder again.

Now I wonder how would I feel to read about all this.

Maxis of old used to include all Maxis overseas operations. Yeah, the brilliant Aircel was included. Maxis of today is just a plain Maxis. No Aircel!

Yeah no Aircel.

A telco company that has a growth of 1 million new subscribers per month!

How lah?

On the Edge Financial Daily: Bold IPO bet pays off for Ananda Krishnan

  • .......... Ananda's privatisation of Maxis angered investors, who had accepted RM15.60 a share. Ananda soon sold a 25% stake to Saudi Telecom at RM16.40 apiece.

    "It's a masterstroke — he forked out money to privatise, and then made more selling it to the Arabs," said the person with knowledge of the billionaire.

Poor minority shareholders... !!!

  • The relisting of Maxis comes after the prime minister called for firms to list in a bid to boost Malaysia's sluggish and illiquid stock market.

    Ananda obliged — but this time, he is listing only the Malaysian operations, leaving the fast-growing Indian and Indonesian businesses with the parent Maxis Communications Bhd.


investbullbear said...

To put the whole Maxis privatisation and re-listing exercise in perspective:

Today’s price range for the shares values Maxis at 36 billion ringgit to 41.25 billion ringgit. That compares with Maxis’s 2007 market value of 40 billion ringgit before it was taken private. The 2007 valuation INCLUDES the company’s overseas operations, which are NOW EXCLUDED.