Kuala Lumpur, December 2: Axiata Group, the Malaysian telecommunications and digital conglomerate, confirmed its exit from the Nepal market on Friday, revealing the sale of Reynolds Holding, the entity holding an 80% stake in Ncell Axiata, to Spectrlite UK.

In a strategic move, Axiata will divest its mobile service unit in Nepal, Ncell, through the sale of Reynolds Holding for a fixed consideration of $50 million. The terms of the deal also encompass a conditional consideration, entitling Axiata to a share of distributions based on Ncell’s future business performance and net distributions declared until 2029.

Axiata had initially acquired a controlling stake in Ncell in 2016 by purchasing Reynolds Holding for $1.37 billion. However, the decision to exit the Nepal market was driven by a comprehensive evaluation of the current business environment in Nepal.

In an official statement, Axiata expressed that the withdrawal from Nepal was influenced by the challenging business conditions, citing “unfair taxation and regulatory uncertainties.” The company deemed it unsustainable to continue operations under the prevailing circumstances.

The move comes in the wake of Axiata’s recent financial report, where the conglomerate, supported by Malaysia’s sovereign wealth fund Khazanah Nasional, reported a widened third-quarter net loss of 797.4 million ringgit ($171.50 million). This marked a significant increase compared to the 52.4 million ringgit net loss reported in the same period the previous year.

Axiata’s decision to divest its stake in Ncell aligns with its strategic realignment and focus on markets that offer more favorable business conditions. The telecommunications giant’s exit underscores the impact of regulatory challenges on multinational corporations operating in diverse markets. As the transaction unfolds, industry observers will keenly watch for developments and the implications for both Axiata and the telecommunications landscape in Nepal.