SingTel to invest $ 2.47 billion in Bharti, Intouch

Singtel will pay 60.83 baht per share for a 21 percent holding in Intouch and 235.62 rupees a share for 7.39 percent of Bharti Telecom in cash to Temasek Holdings Pte, Singapore’s state-owned investment firm, the carrier said in a statement Thursday.

Intouch holds 40.45 per cent stake in Thailand’s largest mobile operator, Advanced Info Services Public Company (AIS), and about 41.14 per cent of Thaicom.

The stake purchases will increase Singtel’s exposure to the high growth telecom sectors in Thailand and India that are being driven by rising mobile data usage.

Singapore Telecommunications Ltd., the city-state’s biggest phone company, plans to spend about $2 billion to invest in Thailand’s Intouch Holdings Pcl and raise its stake in India’s Bharti Telecom Ltd., according to people with knowledge of the matter. Bharti Telecom, meanwhile, is the holding company of India’s biggest telecommunications company, Bharti Airtel Limited (Airtel), that operates in 18 countries in South Asia and Africa.

Singtel said the aggregate consideration payable for the Bharti Telecom sale shares is approximately Singapore Dollars 884 million or $658 million.

Chua described the two Asian markets alongside Africa as “attractive, high-growth markets” for Singtel. The deal comes just ahead of India’s largest-ever spectrum auction to date.

Fitch pointed out that Singtel’s borrowings are already near a level “above which we may consider negative rating action”, and warned that if Singtel were to acquire Temasek’s entire interest in Intouch and fund it through additional debt, the company’s borrowings would increase substantially. “As a group, we enjoy great synergies, economies of scale, and collaborative innovation”, she said. “Singtel has been a strategic partner to both AIS and Airtel for more than 15 years”. Temasek’s stake in Singtel will rise to 52.27 percent from 51.1 percent prior to the share issue. The two market leaders have a combined mobile customer base of more than 380 million across Asia and Africa.

“We have confidence in the long-term performance of India and Thailand”, Singtel chief executive officer Chua Sock Koong (蔡淑君) said at a media briefing in Singapore.

“Both AIS and Airtel are well-positioned to benefit from these trends”. The deal, subject to minority shareholder and regulatory approvals, is expected to be completed by December, it added.