Singtel sells S$1 billion stake in Thailand’s Gulf Development; placement leaves it with 4.95% interest

[SINGAPORE] Singtel has sold a 2.8 per cent stake in Thai energy company Gulf Development for about S$1 billion, it said on Tuesday (Jun 23).

The transaction was executed through a private placement to institutional investors, and will result in cumulative gains of some S$140 million in equity, the group noted.

After the deal, Singtel will still hold a 4.95 per cent stake in Gulf Development, valued at an estimated S$1.8 billion.

The remaining Gulf Development portfolio held by Singtel is “modestly sized but non-trivial”, said Sachin Mittal, DBS Group Research analyst.

He noted that a 90-day lockup applies to the seller on the remaining stake, suggesting that Singtel intends to retain a residual position in the near term rather than fully exit.

Arthur Lang, group chief financial officer of Singtel, said: “Gulf Development’s share price has performed strongly since listing, providing an attractive opportunity for Singtel to crystallise value and reallocate capital towards growth and drive shareholder return.”

The telco received a 7.7 per cent stake in Gulf Development in 2025, following the amalgamation of Intouch Holdings and its largest shareholder Gulf to simplify Singtel’s shareholding in its Thai associate AIS.

Lang emphasised that Thailand remains a key market for Singtel, and the telco will continue having a strong partnership with Gulf Development through its joint investment in AIS and their data centre venture GSA.

Closer to capital recycling target

The transaction is the latest under Singtel’s capital recycling programme Singtel28, which has now unlocked S$6.8 billion.

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Announced in 2024, Singtel28 is a growth plan that would shift capital towards the company’s growth areas and raise dividends.

The initial asset recycling target of S$6 billion has since been raised to a S$9 billion mid-term target.

“(The Gulf Development transaction) gives us considerable ability to fund and sustain our value realisation dividend, value realisation share buyback as well as digital infrastructure investments, putting us on track to deliver sustainable yield and growth over the coming years,” it said.

Mittal likened this deal to Singtel’s recent divestment of a 0.8 per cent stake in Bharti Airtel, which generated S$1.5 billion and yielded an estimated gain of S$1.1 billion.

“While Singtel has not disclosed the specific use of proceeds, this is consistent with management’s strategy of unlocking value to fund growth capex for (its) data centre business,” he said.

Under the Singtel28 capital recycling strategy to return excess capital to shareholders, Singtel undertook a share buyback. As at Jun 22, about 34 per cent of the S$2 billion value-realised share buyback had been deployed.

About 148.8 million shares were bought back and cancelled for S$681 million, Singtel said in a statement.

The full execution of this buyback on a pro forma basis using FY2026 underlying net profit would lead to a permanent 3 per cent accretion in underlying earnings per share (EPS). It puts Singtel on a higher EPS and dividend per share trajectory, the group noted.

Lang said: “While our holding company discount has narrowed significantly since the implementation of Singtel28, we still believe that the current market valuation does not fully reflect the long-term value of the group.”

In the year to date, shares of Singtel have fallen 5 per cent to S$4.23, from S$4.58 at the start of the year.

Shares of Singtel closed S$0.01 or 0.2 per cent lower at S$4.35 on Tuesday.