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Update: Singtel plans up to US$2b IPO for broadband unit, to slash stake: sources

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Singapore Telecommunications (Singtel) plans to list its broadband unit on the local bourse in a deal that could raise about $2 billion, slashing its stake by more than 75 per cent, sources close to the matter said on Thursday.

[SINGAPORE] Singapore Telecommunications (Singtel) is considering listing its broadband unit on the local bourse in a deal that could raise about US$2 billion, sources close to the matter said on Thursday.

One source said Southeast Asia’s largest telco is expected to appoint banks by the end of this year and the initial public offering of NetLink Trust could be launched in the second half of 2017.

Singtel, whose largest shareholder is state investor Temasek Holdings, was given an April 2018 deadline by regulator Infocomm Development Authority to reduce its stake in NetLink Trust, which provides high-speed broadband network.

The sources, who declined to be identified because the listing discussions are being kept private, said Singtel has been mulling a NetLink Trust IPO for years. But they said the company had yet to finalise valuations, set a time frame or appoint banks for the deal.

Singtel’s Group CEO Chua Sock Koong told Reuters by email it was “premature to talk about an IPO at this point.” 

“We have an undertaking with the regulators to sell down our interest in Netlink Trust to less than 25 per cent,” she said. “We would need to assess the various options of the sell down, what the valuations will be like, how best to conduct it.” The Wall Street Journal had reported on Wednesday plans about the potential NetLink IPO.

In a research note last month, Nomura said the enterprise value of NetLink could be between S$4 billion  and S$4.5 billion, adding that it was likely to be listed by next year.

Earlier on Thursday, Singtel reported fourth-quarter net profit was little changed at S$946 million. 

REUTERS