Kuala lumpur: Maybank Investment Bank Bhd (Maybank IB) has reaffirmed its positive outlook on Axiata Group Bhd’s earnings and maintained a ‘Buy’ recommendation with an unchanged target price of RM2.90 per share.

According to BERNAMA News Agency, the investment bank anticipates a significant enhancement in Axiata’s financial leverage due to the potential divestment of its entire stake in Edotco. This strategic move is expected to alleviate Axiata’s debt burden while generating substantial cash inflow.

The investment bank noted that the hypothetical divestment of Edotco could deconsolidate Edotco’s liabilities and bring potential cash proceeds. It further explained the simulation of Edotco’s divestment at seven to 12 times its enterprise value to earnings before interest, taxes, depreciation, and amortisation (EV/EBITDA), suggesting potential proceeds ranging from RM3.2 billion to RM8.3 billion.

At 10.45 am, Axiata’s stock rose four sen to RM2.39, with 121,200 shares being traded, reflecting market confidence in the company’s financial strategies and growth prospects.