Investors

1.         INTRODUCTION

We are pleased to announce that XL, a 66.43%-owned subsidiary of Axiata listed on the Indonesia Stock Exchange ("IDX") (formerly known as Jakarta Stock Exchange), had on 28 October 2015 announced its plan to establish the Sukuk Programme.

 2.         DETAILS OF THE SUKUK PROGRAMME AND THE ISSUER

The Sukuk Programme will be established under a 2-year shelf registration programme. The issuance of Shelf Sukuk Ijarah I XL Axiata Tranche I Year 2015 ("Tranche I Sukuk") amounting up to IDR1.5 trillion shall be based on the Shariah principle of Ijarah, with the payment of Ujrah to be made quarterly in arrears. Tranche I Sukuk shall have 4 Series which consist of Series A, Series B, Series C and Series D. The maturity of Series A will be 370 calendar days, the maturity of Series B will be 3 years, the maturity of Series C will be 5 years and the maturity of Series D will be 7 years.

The Tranche I Sukuk has been assigned a rating of  AAA(idn) by PT Fitch Ratings Indonesia. The Tranche I Sukuk to be issued under the Sukuk Programme will be listed on the IDX.

The other salient terms and conditions of the Sukuk Programme are as enclosed in the appendix to this announcement.

XL is one of the major cellular providers in Indonesia. XL is 66.43%-owned by Axiata through Axiata Investments (Indonesia) Sdn. Bhd. and is part of the Axiata Group of Companies. XL became a public company and listed its shares on the IDX in 2005 under the name of PT Excelcomindo Pratama Tbk, before assuming its present name in 2009. Operating commercially since October 1996, XL currently serves 62.9 million subscribers as of October 2015.

3.         RATIONALE FOR THE SUKUK PROGRAMME

The Sukuk Programme is a capital management initiative by XL to optimise its balance sheet and improve its capital efficiency, while raising its profile in the international and Islamic debt capital markets. The Sukuk Programme will provide XL an avenue to diversify its funding sources and allow XL access to a greater diversity of investors, both onshore and offshore. 

The net proceeds from the issuance of Tranche I Sukuk under the Sukuk Programme, after deducting expenses in relation thereto, are expected to be utilised for XL's working capital purposes in order to support XL's business activity in terms of 2G Radio Frequency Fee payment to the Government for the period of December 2015 - December 2016.

​4.         EFFECTS OF THE SUKUK PROGRAMME

4.1        Issued and Paid-Up Share Capital and Substantial Shareholders' Shareholdings

The Sukuk Programme and any issuance of Sukuk thereunder will not have any effect on Axiata's issued and paid-up share capital or any of the substantial shareholders' shareholdings in Axiata.

4.2        Earnings and Earnings per Share ("EPS"), Net Assets per Share and Gearing

The effects of any issuance under the Sukuk Programme on the consolidated earnings and consolidated EPS of Axiata are not expected to be material. However, the actual effects will depend on, amongst others, the effective financing cost of each Sukuk issuance and the specific use of proceeds thereof, both of which cannot be determined at this stage. 

Any issuance of Sukuk under the Sukuk Programme is not expected to have any material effect on the consolidated Net Assets per share of Axiata.

Any issuance of Sukuk under the Sukuk Programme will increase Axiata's consolidated gearing, the quantum of which is dependent on the amount issued.

For illustrative purposes, based on Axiata's audited consolidated statement of financial position as at 31 December 2014 and assuming the maximum amount of IDR5.0 trillion nominal value of Sukuk* are issued as at 31 December 2014, Axiata's consolidated gearing would increase from 0.62 times to 0.68 times (before taking into consideration the use of proceeds and expenses relating to the Sukuk Programme and issuance of Sukuk thereunder).

Note:

*               Approximately RM1.4 billion, based on the middle rate of IDR100:RM0.0281 as at 12.00 noon on 31 December 2014 as published by Bank Negara Malaysia.

5.         APPROVALS OBTAINED/REQUIRED

The Sukuk Programme is not subject to approvals from Axiata's shareholders and/or any regulators/authorities in Malaysia.

XL had obtained a pre-effective statement from OJK on 27 October 2015 for the commencement of bookbuilding of the Tranche I Sukuk and XL has signed a preliminary listing agreement with IDX as required for the primary listing of the Tranche I Sukuk issued under the Sukuk Programme.

6.         INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of Axiata's Directors, major shareholders and/or persons connected to them has any interest, direct or indirect, in the Sukuk Programme.

7.         ADVISORS

PT CIMB Securities Indonesia, PT Mandiri Sekuritas and PT Maybank Kim Eng Securities were appointed as the joint lead underwriters for the Sukuk Programme.

This announcement is dated 28 October 2015.

This announcement does not constitute a public offer as defined in Indonesian Capital Market Law, Law No. 8 of 1995 or an offer to sell or the solicitation of an offer to buy any securities in Indonesia, Malaysia, the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No securities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of such securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offer of securities is to be made by Axiata or XL in the United States.

No approval from the Securities Commission of Malaysia ("SC") is or will be obtained under the Capital Markets and Services Act 2007 ("CMSA") in respect of the securities, and no prospectus which complies with the requirements of the CMSA and the guidelines of the SC has been registered with the SC pursuant to the CMSA or with any other regulatory body in Malaysia. No securities may be offered or sold to any person in Malaysia, except to a person falling within paragraphs 7, 8, 9, 11, 12, 13 or 14 of Schedule 6 of the CMSA, or any other persons as may be specified by the SC in any guideline issued under Section 377 of the CMSA, by a holder of a Capital Markets Services Licence who carries on the business of dealing in securities.