Regional telecoms operator Axiata sold a 10 per cent stake in its Cambodian subsidiary Smart Axiata to Japan-based Mitsui for $66 million.

Axiata said the transaction price was based on an equity value of $724 million after factoring additional cash received from dividends as part of the transaction structure. The deal is expected to close by end-May, following which Axiata will have an 82.5 per cent interest in Smart.

Under the agreement, Axiata granted Mitsui a call option to acquire an additional 10 per cent interest, exercisable within 12 months from the completion of the transaction.

Malaysia-headquartered Axiata reportedly was looking to offload part of its stakes in three overseas units, which would help it raise as much as $700 million to pay down its debt. Reports surfaced in September 2016 it was considering selling 30 per cent of Smart and 30 per cent of Sri Lanka’s Dialog Axiata. It was also discussing divesting about 11 per cent of its total 66.4 per cent stake in Indonesian unit XL Axiata.

Jamaludin Ibrahim, president and CEO of Axiata, said: “This strategic partnership with Mitsui will support the growth efforts of Smart, particularly in the areas of digital services and IoT and our vision of becoming a new generation digital champion. With Mitsui in the fold, Smart will be in a position to offer enhanced digital services that would leapfrog Cambodia’s digital economy. We look forward to leveraging on synergies from this strategic partnership.”

He said Axiata remains committed to maintaining its majority stake in Smart, which “has consistently outperformed its competitors with its clear customer proposition, innovative product solutions and effective cost controls”.

Smart is the second largest mobile operator in Cambodia with a 30 per cent market share, according to GSMA Intelligence. About 7 per cent of its 8.4 million mobile subscribers are on 4G plans.