MIL buys equity stake in Apollo Towers

Apollo Towers raised US$30 million in equity from Myanmar Investments International Limited (MIL) on July 31, six weeks after receiving approval for a $250 million loan from the US government’s development finance arm, Overseas Private Investment Corporation (OPIC).

The towers company, which was set up by former CEO of Orange Group Sanjiv Ahuja and US private equity firm TPG, will use the capital to build 717 towers – recently commissioned by Norwegian operator Telenor.

Apollo has built 1100 towers for Telenor since the rollout began in July last year. The company has not yet received an order from rival telecoms companies – Qatar’s Ooredoo or local incumbent Myanma Posts and Telecommunications (MPT).

By the end of June, Telenor had 2308 tower sites and 50 percent population coverage. CEO Petter Furberg has publicly stated that he targets 3500 to 4000 sites before the end of the year, and 8500 over the coming years.

Telenor has also pledged to increase its network coverage to 90pc of Myanmar within five years and Ooredoo has pledged that 97pc of the population will have access to its 3G network by 2018, said MIL in a July 31 statement.

“The pledged coverage rates will require a significant expansion of the country’s telecommunication tower network, and Apollo is ideally positioned to capitalise on the expansion,” it said.

The 2014 Green Power for Mobile report by the International Finance Corporation (IFC) in collaboration with industry body GSMA estimates that 17,300 telecommunication towers will need to be built by 2017 to cover 70pc of Myanmar’s population.

Mobile telecommunications is one of the fastest-growing sectors in Myanmar, said MIL, adding that since the government pledged to connect Myanmar in 2013 “industry analysts estimate that the country’s mobile phone penetration rate is now at around 37pc, compared to just 9pc two years ago”.

MIL’s investment into Apollo is its second in Myanmar, after it bought part of a microfinance joint-venture company in August year. The London-listed company led a group of investors into the deal, investing $20 million itself.

Earlier this month, MIL raised $20 million on the AIM market of the London Stock Exchange. It has lined up several more potential deals of different sizes and plans to invest across a range of sectors including telecoms, finance, healthcare and education, according to director U Aung Htun.

“It’s possible if certain deals come together that we may even have to go back to the market [to raise more],” he told The Myanmar Times earlier this month.

In April 2015, MIL formed a joint venture to apply for a securities licence for the forthcoming Yangon Stock Exchange. The government has yet to announce which firms have been successful in applying for a licence.

MIL is one of just a handful of internationally listed, Myanmar-focused companies, also including Yoma Strategic Holdings, chaired by Serge Pun, and tech startup MySquar.

Source: Myanmar Times

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