Axiata to Exit Nepal, Selling Its Stake to Spectrlite UK for USD 50 Million

Axiata has announced that it is exiting from Nepal by selling Reynolds Holding Limited, which owns about 80% of Ncell Axiata Limited, to Spectrlite UK Limited.

The owner of Spectrlite UK is Satish Lal Acharya, a Nepali origin currently residing in Singapore. Satish Lal Acharya is married to Bhavana Singh Shrestha, the owner of Sunivera Capital Venture, which holds the remaining 20% of Ncell’s shares. With this arrangement, the Acharya family collectively owns Ncell.

Axiata, the Malaysian parent company of Ncell, has agreed to sell Ncell for a fixed consideration of USD 50 million, of which USD 5 million is payable within 6 months of transaction completion and the remainder is payable after 48 months post transaction completion.

The agreement also includes a conditional consideration of a share of future distributions determined by Ncell’s business performance and net distributions declared until 2029, as well as any gains the buyer gets during that time.

In April 2016, Axiata acquired Ncell from Telia Company (formerly TeliaSonera Group of Sweden) for USD 1.365 billion. However, the acquisition stirred significant controversy due to unpaid capital gains tax.

Axiata withdrew from Nepal citing unfair taxation, regulatory uncertainties, and the risk associated with the expiry of the company’s mobile license in 2029.

Ncell’s YTD (year-to-date) revenue ex-device has decreased by 6.4%, reads the press statement. Axiata says Ncell is facing challenges in its revenue generation, primarily driven by lower core revenue due to decreased domestic interconnect rates and MoU reduction.

External factors like open year tax assessment and higher net finance costs have led to a decline in both EBIT (Earnings Before Interest and Taxes) and overall profitability (PATAMI).

Despite the decrease in revenue, Ncell asserts that it contributed 283 billion rupees in taxes and fees as of the last Fiscal Year 2021/2022 since its inception.

Ncell, both directly and indirectly, supports more than 25,000 jobs and connects over 17 million customers across its networks. Within its Corporate Social Responsibility scope, Ncell has invested more than 1.74 billion rupees in various critical national projects, including education, health, disaster management, and the environment.

Ncell was first incorporated as “Mero Mobile” in 2004. Four years later, it was acquired by Telia Company (previously known as TeliaSonera Group of Sweden) and rebranded as “Ncell” in 2010. On April 12, 2016, Ncell became part of Axiata Group Berhad, a telecommunications group in Asia.

Ncell converted into a public limited company and also changed its name to ‘Ncell Axiata Limited’ on August 3, 2020.

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