ST Electronics proposes to buy 51% stake in SPTel

SINGAPORE Technologies Electronics (ST Electronics), the electronics arm of Singapore Technologies Engineering (ST Engineering), has entered into a conditional share purchase agreement to acquire a majority stake in SP Telecommunications (SPTel), according to a company filing on Wednesday.

ST Electronics will acquire a 51 per cent stake in SPTel from Singapore Power for a purchase consideration estimated at S$54 million, to be finalised post-closing, subject to a maximum of S$60 million. SP will retain a 49 per cent stake in SPTel, which owns an extensive network of fibre optic back-haul infrastructure and facilities in Singapore.

The acquisition will be funded internally by ST Electronics and will be satisfied fully in cash on closing. The figure was arrived at, after arm's length negotiations between the parties, taking into account SPTel's net assets, current financial performance and future growth prospects. The unaudited consolidated net tangible assets (NTA) of SPTel as at Oct 31, 2016 stood at S$100 million.

Subject to regulatory approvals, the proposed transaction is expected to close by second quarter of this year. On closing, ST Electronics, SP and SPTel will enter into a shareholders' agreement to regulate the respective rights and responsibilities of ST Electronics and SP as shareholders of SPTel.