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Singtel says to buy Temasek's stakes in Intouch and Bharti Telecom for S$2.47b

Thursday, August 18, 2016 - 07:34
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Singtel said on Thursday that it plans to buy a 21 per cent stake in Intouch Holdings PCL (Intouch) and a 7.39 per cent stake in Bharti Telecom (BTL) from Temasek for S$2.47 billion in cash.

SINGTEL said on Thursday that it plans to buy a 21 per cent stake in Intouch Holdings PCL (Intouch) and a 7.39 per cent stake in Bharti Telecom (BTL) from Temasek Holdings for S$2.47 billion in cash.

The Singapore telco will acquire 673.3 million Intouch shares at THB 60.83 each, or for S$1,585 million in total. The price is based on the 20 trading days volume weighted average price (VWAP) of Intouch.

It will buy 186.6 million BTL shares at 235.62 Indian rupee (INR) each, or for S$884 million in total. This is based on a 10 per cent discount off the 20 trading days VWAP of Bharti Airtel.

Singtel, which is 51.12 per cent owned by Temasek, will also place 386 million new Singtel shares to Temasek at S$4.16 a share, or S$1,605 million in total. This represents one per cent discount off its 20 trading days VWAP. The issue price also represents about 65 per cent of the sum of the Intouch and BTL total price.

Intouch holds 40.45 per cent stake in Thailand's AIS, and about 41.14 per cent of Thaicom. Singtel has an interest of 23.32in AIS. After the acquisition of Temasek's stake in Intouch, Singtel will own 21 per cent of Intouch.

As for BTL, the Indian telco holds about 45.09 per cent stake in f Bharti Airtel (BAL). Singtel currently has a 39.78 per cent interest in BTL and an interest of 15.01 per cent in BAL. After the purchase of the BTL shares, Singtel's interest in BTL will increase to 47.17 per cent from 39.78 per cent.

"The acquisitions will increase the exposure of Singtel and its subsidiaries ...to the high growth telecom sectors in Thailand and India driven by rising mobile data penetration and increased usage,'' Singtel said in a release.

It said the purchases would increase its exposure to quality assets. Intouch and BTL own assets that are leaders in their respective markets, with strong track records of earnings growth. AIS and BAL have secured spectrum holdings for the long term and invested extensively in their networks.

"These investments position both companies well to compete and capture the growth in mobile internet services,'' Singtel explained.

The acquisitions are not expected to affect Singtel's dividend policy. Instead, they are expected to enhance shareholder value ad maximise the value of its existing businesses.

"This includes securing greater economic benefit from existing associates with strong market fundamentals and operating performance,'' Singtel said.

Singtel said the purchases would be funded by S$1.605 billion in proceeds from placement of shares, as well as internal cash and short-term debt.

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