KUALA LUMPUR, July 18 — Malaysian tycoon Ananda Krishnan is set to restructure his premier satellite television operator, Astro All Asia Networks, in a RM9 billion transaction that will rank as the region’s largest corporate exercise so far this year.
Under the proposed corporate deal, Astro’s two main shareholders — the Ananda-controlled private investment company Usaha Tegas and Malaysia’s state-owned Khazanah Holdings — will acquire the satellite television company’s fledgling and still unprofitable international business interests.
The planned hive-off of its international business will turn the Malaysian-listed Astro into a clean entity that will house its profitable domestic operations, bankers close to the transaction told The Straits Times.
The corporate restructuring exercise, which could be announced as early day after tomorrow, will also feature a major sweetener for the company’ shareholders.
The company is set to announce a one-off dividend payment of about RM1 per share, the bankers said, adding that the whole deal will value Astro at around RM9 billion.
The planned transaction is set to remove the drag on Astro’s share performance, which has been bogged down by problems in its international operations.
Speculation that a restructuring is imminent has re-ignited interest in the stock in recent weeks.
Astro shares, which have been hovering at just under RM2.80 apiece for much of the year, currently trade at around RM3.50 apiece.
A windfall for shareholders is emerging as a hallmark of Ananda’s large corporate manoeuvres.
When he launched his buyout of his listed mobile telecommunications company, Maxis Communications, in May 2007, he paid sharp premium for the shares held by the public in a deal valued at over RM16 billion.
According to bankers involved in the Maxis transaction, government-controlled entities such as Khazanah, Permodalan Nasional, the Muslim pilgrimage fund Tabung Haji and the two national pension funds collectively received just over RM7.5 billion for their holdings in the mobile telco.
Under the soon-to-be-announced Astro transaction, Khazanah, the state investment agency modelled along the lines of Singapore’s Temasek Holdings, will receive close to RM340 million from the dividend payout, bankers with knowledge of the deal said.
Khazanah will also retain its 22 per cent interest in the listed Malaysian entity and control a roughly 33 per cent stake in the private vehicle that will house Astro international business.
Ananda’s Usaha Tegas and its other affiliates will control the remainder in the yet-to-be-named private entity, the bankers said.
Over the past decade, the 71-year-old Ananda — who is ranked as one of South-east Asia’s wealthiest tycoons — has emerged as a powerful force in the region’s multimedia sector, with Astro and Maxis forming the cornerstones of his new-media empire.
Astro, which has invested over RM1 billion to develop its own content for the region’s large Malay-language speaking population, beams its services to more than three million households currently. Bankers say the company’s customer base could hit 3.5 million in the next three years.
But results from its overseas investments have been mixed.
Its foray into Indonesia, under a joint venture project with the powerful Lippo Group controlled by the Riady family, has been a disaster.
Astro is now caught in a messy legal wrangle with Lippo and has been forced to make provision for losses of just over RM1 billion for its investment in the Indonesian venture.
The company has moved into the entertainment and media markets in India, China and other parts of South-east Asia, and bankers estimate that Astro will require investment of over RM1 billion in the next three years to develop these markets. — ST