KUALA LUMPUR/SINGAPORE – A unit of Malaysian telecoms firm Axiata Group (AXIA.KL) has called off a $940 million deal to buy 13,000 telecoms towers in Pakistan after regulators there failed to provide all approvals for the transaction announced a year ago.

Axiata subsidiary edotco Group Sdn Bhd said in a statement on Monday that it will not proceed with the purchase of Deodar, a unit of Pakistan Mobile Communications Ltd (PMCL) that owns the towers.

The deal, announced in August last year, would have made edotco the second-largest multi-country tower operator globally and the eighth-largest independent tower firm.

edotco, which is 62.4 percent-owned by Axiata, said some sale conditions had not been met, including regulatory approval for the resulting change of control in Deodar.

Sources familiar with the matter said the cancellation came as a surprise because the deal had already won some regulatory approvals. Clearance from Pakistan’s central bank had also been expected.

“This deal was supposed to close last year but was stuck with the central bank and the parties kept on extending deadlines,” said one financial source who declined to be named as he was not authorized to speak about the deal.

“The patience ran out with the bearish sentiment toward emerging markets. A decision had to be taken,” he said.

The sources also said edotco’s plan to raise at least $500 million in an initial public offering at the end of this year or early 2019 is set to be scaled down and could be delayed.

The Pakistan central bank did not immediately respond to a request for comment.

Regulatory approval deadlines were pushed back several times and while they were never rejected, it was unclear why the approval was not granted, said Ali Naseer, chief corporate and regulatory affairs officer at Jazz, the brand name of the Pakistani mobile operator.

“Both parties decided mutually rather than to be in this extended limbo, to terminate the deal and move on to other things,” Naseer said.

edotco and its Pakistani partner Dawood Hercules Corp Ltd (DAWH.KA) had planned to acquire Deodar.

Axiata’s shares dropped as much as 2.4 percent after the announcement, but pared losses. Malaysian markets were closed on Monday.

TA Securities analyst Wilson Loo said in a report that the termination was a negative as “expectations for the associated growth and earnings accretion at edotco via the inorganic route is effectively removed.”

Since it was formed in 2012, edotco has grown rapidly and attracted new shareholders. It currently operates and manages a regional portfolio of more than 28,000 towers in Malaysia, Myanmar, Bangladesh, Cambodia, Sri Lanka and Pakistan.

“We continue to develop our pipeline of opportunities into Pakistan as well as into other markets in South and Southeast Asia and are confident we will be able to meet our goals for business growth,” edotco chief executive Suresh Sidhu said in the statement.