DIALOG AXIATA PLC (DIAL.N0000)

A rights may be on the cards if this goes through.
DIAL's retained earnings may not be enough

What it supposed to do wit Aritel??

Axiata is planning on making an offer to buy the entire operation in SL. DIAL may not have enough retained earnings to do this. There are two options 1) rights 2) Axiata invests independently.


http://www.business-standard.com/article/companies/axiata-eyes-airtel-s-lanka-business-113030500013_1.html

Airtel Lanka, the operating company of Bharti Airtel in that country, has 1.7 million customers across 25 administrative districts, according to a Bharti Airtel statement. The company also offers 3.5G services (a grouping of disparate mobile telephony and data technologies to provide better performance than 3G systems, as an interim step towards deployment of 4G capability) in major Sri Lankan towns and has a distribution network of 42,000 retailers, the statement added.

In January 2009, Bharti Airtel had announced the company would invest about $200 million in Sri Lanka till 2012.

An analyst tracking Bharti Airtel said the Sri Lankan market wasn't very big and investing more money might not be logical for Airtel Lanka. Selling the business, however, would reduce Bharti Airtel's debt and the company would get better headroom to invest in African countries, where it was growing at a faster rate, the analyst said.

In 2009, Axiata had placed a bid to acquire Tigo, then the third-largest operator in Sri Lanka. However, Tigo was acquired by Etisalat, as Axiata had pulled out because of the steep valuation.

rainmaker wrote:A rights may be on the cards if this goes through.
DIAL's retained earnings may not be enough

What is , "retained earnings " has to do with an acquisition ?
Can you clarify ?
(probably there are enough layman like me , interested in this issue )

More likely Airtel may buy up DIAL.

Then should we wait for the deal or sell right now?

Airtel's parent is in debt.... telecom in India has been a car crash in slow motion

rainmaker wrote:Airtel's parent is in debt.... telecom in India has been a car crash in slow motion

rainmaker wrote:A rights may be on the cards if this goes through.
DIAL's retained earnings may not be enough


What is , "retained earnings " has to do with an acquisition ?
Can you clarify ?
(probably there are enough layman like me , interested in this issue )

Axiata is planning on making an offer to buy the entire operation in SL. DIAL may not have enough retained earnings to do this.

Retained earnings are accumulated profits and generally they are not adjusted for non cash items (dep and prov) so they do account for absolute cash inflows i think most of the companies use excess cash to make an acquisition (cash and cash equivalent) and debt.

Now it looks like Axiata may go after Airtel without DIAL


http://www.theborneopost.com/2013/03/07/no-funding-issues-for-axiata-on-potential-airtel-lanka-acquisition-analyst/

KUCHING: Axiata Holdings Bhd (Axiata) will not have any funding issues if it is to acquire Indian telecommunications (telco) giant Bharti Airtel’s business in Sri Lanka as the group has a large cash pile and can leverage its balance sheet to make the move.

Outlining this, Cheow Ming Liang of the research arm of Kenanga Investment Bank Bhd yesterday stated, “As at end-FY12 (financial year 2012), the group has a cash pile of RM7.9 billion with a gross debt to EBITDA (earnings before interest, tax, depreciation and amortisation) ratio of 1.7 times.

“The ratio is still below its optimal capital structure of two to 2.2 times gross debt to EBITDA level, suggesting that Axiata still has room to leverage up its balance sheet if needed.”

Cheow pointed out the group’s financial readiness in reference to an Indian media report which said that Axiata had approached Bharti Airtel and multi-national telco Hutchison to acquire the their respective businesses in Sri Lanka.

In citing the report, Cheow said that Airtel Lanka (the operating company of Bharti Airtel in Sri Lanka) had an estimated market share of eight to nine per cent compared with the group’s Sri Lankan operating company Dialog Axiata which commanded 40 per cent.

“The news is not a surprise to us as Axiata has always reiterated its forward strategy (to the investor community) to focus on in-country consolidation within its subsidiary companies.

“Funding is not an issue in our view should any in country consolidation exercise materialise. We estimate that Axiata can raise up to RM3.6 billion if the company decides to maximise its optimal capital structure,” Cheow highlighted.

Airtel Lanka had 1.7 million customers across 25 administrative districts and offered 3.5G services in the major Sri Lankan towns and had a distribution network of 42,000 retailers, according to the report.

Airtel Lanka is currently providing island-wide coverage, supported by 1,600 towers covering all 25 districts. Of these, over 650 towers offer 3G services to each region.

Cheow was brought to understand that Bharti Airtel had invested over US$325 million in its Sri Lanka operations.

In FY12, Dialog contributed 7.7 per cent to Axiata’s total turnover of RM17.6 billion while its normalised profit after tax and minority interests accounted for 6.2 per cent of the group’s core net profit of RM2.8 billion.

“The group’s data business is expected to continue to be its main growth driver in 2013, especially in the more mature markets,” Cheow said, explaining to The Borneo Post that the markets included Malaysia and Indonesia.

“Axiata’s consolidations and market ‘rebalancing’ strategy in some operating company countries (such as Cambodia) is expected to start bearing fruits in FY13.

“Meanwhile, we believe competitions are intensifying in both Robi (Bangladesh) and Dialog (Sri Lanka) while XL (Indonesia) may continue to face challenges due to the changing industry dynamics,” he opined.

The analyst made no changes to Kenanga Research’s FY13 and FY14 earnings forecasts for the group and accordingly maintained the stock’s target price at RM6.86 per share.

@ Rainmaker (said) - " Now it looks like Axiata may go after Airtel without DIAL"

Hi Rainmaker - However way they do this (if it happens), eventually Axiata must merge it with Dialog for it to make sense. They may buy Airtel Sri-lanka from Bharti Airtel through Axiata (due to Cash Pile at Axiata etc) and then merge it with Dialog through Share Swap whereby Dialog issues new shares in Dialog to Axiata for this merger / acquisition.

The Alchemist wrote:@ Rainmaker (said) - " Now it looks like Axiata may go after Airtel without DIAL"

Hi Rainmaker - However way they do this (if it happens), eventually Axiata must merge it with Dialog for it to make sense. They may buy Airtel Sri-lanka from Bharti Airtel through Axiata (due to Cash Pile at Axiata etc) and then merge it with Dialog through Share Swap whereby Dialog issues new shares in Dialog to Axiata for this merger / acquisition.

Is it really required?

Why cannot Axiata buy Airtel (if they want) and do a name change?

smallville wrote:

The Alchemist wrote:@ Rainmaker (said) - " Now it looks like Axiata may go after Airtel without DIAL"

Hi Rainmaker - However way they do this (if it happens), eventually Axiata must merge it with Dialog for it to make sense. They may buy Airtel Sri-lanka from Bharti Airtel through Axiata (due to Cash Pile at Axiata etc) and then merge it with Dialog through Share Swap whereby Dialog issues new shares in Dialog to Axiata for this merger / acquisition.

Is it really required?

Why cannot Axiata buy Airtel (if they want) and do a name change?

@ smallville - you mean Axiata buying Airtel and operating under different name in Sri-Lanka ? Well, it will certainly not be fair to the Minority Shareholders of Dialog if the Controlling Interests run a rival company in the same market. The main reason for them (Axiata) contemplating buying out Airtel is to increase market share from 40 to 48 % (thereby taking out the competition).
If you mean why would'nt Dialog buy Airtel directly and finance through a Rights Issue (Since Parent Axiata has the cash anyways), they may not want to burden the minority shareholders of Dialog with a cash call.

Whatever way it ends up, it is sure to be a very big deal. DIAL approached Tigo at one stage and then withdrew because the price was too high. Then Etisalat came in at a ridiculous price (which was never disclosed)

Now Airtel..... what would the value be. Greater than 5 Billion for sure. What about 10 B, 15 B ????

I don't hold DIAL but I think it is very material to them.

DIALOG AXIATA PLC country's leading private sector telecom service provider

Date - 26.1.2015

Share Code DIAL.N0000
Current Price - Rs.13.60
Issued Quantity - 8,143,778,405
Market Capitalization - Rs.110,755,386,308
Market Capitalization as percentage (%) of Total Market Capitalization - 3.78%

Any news on this stock?

DIALOG POSTS 6.1 billion Net Profit for FY 2014 and expects to pay appproximately 1.525 billion as super gain tax.
Wed, Feb 18, 2015, 16:39 Gmt

Feb 18, Colombo: Sri Lanka's premier telecommunications service provider, Dialog Axiata PLC, today announced its consolidated financial results for the year ended 31st December, 2014 of the main company and the Dialog Axiata Group post-consolidation with subsidiaries Dialog Broadband Networks and Dialog Television.

mmm.. this will bring "yahapaalanaya" in the mobile industry in sri lanka.

Teller wrote:DIALOG POSTS 6.1 billion Net Profit for FY 2014 and expects to pay appproximately 1.525 billion as super gain tax.
Wed, Feb 18, 2015, 16:39 Gmt

Feb 18, Colombo: Sri Lanka's premier telecommunications service provider, Dialog Axiata PLC, today announced its consolidated financial results for the year ended 31st December, 2014 of the main company and the Dialog Axiata Group post-consolidation with subsidiaries Dialog Broadband Networks and Dialog Television.

So thats good, thy " making profit" and paying tax.Main thing is how they going to use this tax, waste like previous government or use it wisely.

omegaplus wrote:

Teller wrote:DIALOG POSTS 6.1 billion Net Profit for FY 2014 and expects to pay appproximately 1.525 billion as super gain tax.
Wed, Feb 18, 2015, 16:39 Gmt

Feb 18, Colombo: Sri Lanka's premier telecommunications service provider, Dialog Axiata PLC, today announced its consolidated financial results for the year ended 31st December, 2014 of the main company and the Dialog Axiata Group post-consolidation with subsidiaries Dialog Broadband Networks and Dialog Television.

So thats good, thy " making profit" and paying tax.Main thing is how they going to use this tax, waste like previous government or use it wisely.

Definitely this will be used for unproductive work.

soileconomy wrote:

omegaplus wrote:

Teller wrote:DIALOG POSTS 6.1 billion Net Profit for FY 2014 and expects to pay appproximately 1.525 billion as super gain tax.
Wed, Feb 18, 2015, 16:39 Gmt

Feb 18, Colombo: Sri Lanka's premier telecommunications service provider, Dialog Axiata PLC, today announced its consolidated financial results for the year ended 31st December, 2014 of the main company and the Dialog Axiata Group post-consolidation with subsidiaries Dialog Broadband Networks and Dialog Television.

So thats good, thy " making profit" and paying tax.Main thing is how they going to use this tax, waste like previous government or use it wisely.

Definitely this will be used for unproductive work.

Build 500,000 houses!

The Super Gain tax is at an SBU level & hence the total tax liability at a group level is close to a staggering 3.3b.

Some companies will face cash flow problems due to this tax.also possible negative cash flows in coming years too.

Teller wrote:Some companies will face cash flow problems due to this tax.also possible negative cash flows in coming years too.

Negative cash flows in the coming years? Why? My understanding is that it's a one time tax and many of these companies, especially Dialog and Access are cash laden companies.

I may be wrong however.

Profitable large corporations often do their business expansion plans with a view to capture a high market share in a competitive environment. It could be acquisition of business, property, new technology, human assets, sponsorship program, advertisement, & business diversification.

Unexpected super tax imposed has become a huge blow to not only to existing plans to be launched but also cash flow requirements for operational activities & future transactions already locked in.

Well said worthiness.

It's always been a pleasure reading your posts !

worthiness wrote:Profitable large corporations often do their business expansion plans with a view to capture a high market share in a competitive environment. It could be acquisition of business, property, new technology, human assets, sponsorship program, advertisement,  & business diversification.

Unexpected super tax imposed has become a huge blow to not only to existing plans to be launched but also cash flow requirements for operational activities & future transactions already locked in.

I have some information about it. Pl collect at this level 11.50 is good price. 15/= sure....
Last chance to collect @ 11.50...

Any crossing at Rs 15??

Good chance to collect today @ 11.10 but no money to buy....

Did you collect at low price?... I collected some today @ 11.40 too... I have enough qty now.... Please be seated and පටි තද කර ගන්න. It's going to go it's journey... Confirmed....

dialog is best share but i have no idea it move up to 15 rupees.according to mahesh amaliya join there it go up 13 rupees only.