Axiata Group sells Ncell to Spectrlite UK Ltd. for $50 million
In a strategic move within the telecommunications landscape, Axiata Group has successfully sold its substantial 80% shares in Ncell to Spectrlite UK Ltd., a UK-based company, for a fixed consideration of $50 million. This significant development marks Axiata’s swift exit from the Nepali market, driven primarily by the escalating business challenges faced in Nepal.
Spectrlite UK Ltd., a recently established entity, orchestrated the acquisition and boasts investments from the Acharya brothers, Satishlal Acharya and Sachinlal Acharya. Notably, the Acharya brothers also have investments in Sunivera Capital Venture Pvt. Ltd., currently holding a 20% stake in Ncell.
The journey leading to this divestiture traces back to 2015 when Axiata acquired Ncell from TeliaSonera in a billion-dollar deal. The Malaysian conglomerate further solidified its position by acquiring Reynolds Holdings for $1.37 billion, securing the now-transferred 80% shares in Ncell. In Nepali currency, this amounted to a staggering total of Rs 1.36 trillion at the then exchange rate, effectively concluding TeliaSonera’s involvement with Ncell.
Axiata has officially confirmed the sale through an unconditional agreement with Spectrlite UK Ltd. The company stated that it has “entered into an unconditional sale and purchase agreement with Spectrlite UK Limited for the sale of Reynolds Holding Limited, which owns approximately 80% equity stake in Ncell Axiata Limited.”
The decision to exit Nepal, as articulated by Axiata, is grounded in a meticulous evaluation of the prevailing business environment. Axiata highlighted that the current conditions of unfair taxation and regulatory uncertainties rendered the continuation of operations unsustainable.
Following the announcement, Vivek Sood, Axiata’s Group Chief Executive Officer and Managing Director, expressed, “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.”
Spectrlite UK Ltd.’s ownership of Ncell has been confirmed by the telecom giant as well. The company conveyed that Spectrlite will acquire a 100% stake in Reynolds Holdings, translating to an 80% ownership share in Ncell. Spectrlite UK Ltd. expressed commitment to driving Ncell forward, expanding services, enhancing quality, and introducing digital innovations.
Owner of Spectrlite UK Ltd., Satish Lal Acharya, emphasized the company’s dedication to innovation, investments, and providing life-enhancing services to customers. He mentioned, “Spectrlite is pleased to announce an agreement for the acquisition of a controlling shareholding in Ncell.”
Meanwhile, Ncell’s CEO and MD, Jabbor Kayumov, expressed optimism regarding the change in ownership. He stated, “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.”
However, it is noteworthy that the completion of the deal may face procedural hurdles. Despite finding a buyer in Spectrlite UK Ltd., Axiata must navigate the approval process, as the telecom regulator Nepal Telecommunication Authority (NTA) requires shareholders to obtain approval before buying, selling, or transferring ownership. This regulatory step could potentially complicate or delay the selling of Ncell shares to Spectrlite.
As the telecommunications landscape in Nepal undergoes this transformative change, the industry awaits the unveiling of Ncell’s refined plans and anticipates how the evolving ownership structure will impact the telecommunications landscape in the country. Spectrlite UK Ltd. is set to pay Axiata around Rs 67 crore out of Rs 6.67 billion within the next six months, with the remaining due amount to be settled within the next four years. However, specific financial details are yet to be disclosed by the involved parties. This development effectively quashes previous speculations about Chaudhary Group acquiring Axiata’s shares in the private telco, highlighting the dynamic nature of the telecommunications sector in Nepal.