Singtel noted that the transaction will help to meet the group’s needs for 5G and growth initiatives in the next few years
Singaporean operator Singtel announced plans to divest part of its stake in Indian operator Bharti Airtel for about SGD2.25 billion ($1.6 billion).
In a statement, Singtel noted it would sell a 3.3% stake in the Indian carrier to Bharti Telecom, a joint venture between Bharti Enterprises and Singtel.
Singtel also said that the transaction is expected to close before November 23.
In a release, Singtel’s CFO Arthur Lang, said: “As long-term strategic investors and partners, the value of our stakes in our regional associates has risen substantially over the years but has not been properly reflected in our share price. This sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizeable value of our holdings in Airtel. It is also part of our capital management approach to take monetization opportunities that allow us to increase our return on invested capital and enhance total shareholder returns.”
Lang said the transaction will help to meet the group’s needs for 5G and growth initiatives in the next few years.
After this transaction, the Singtel Group is expected to own an effective stake of 29.7%, which is estimated to be worth SGD22 billion.
Sunil Mittal, chairman of Bharti Enterprises said: “After this transaction, Bharti Telecom will remain the principal vehicle to hold controlling shares in Airtel. Bharti Enterprises and Singtel have agreed to work towards equalizing their effective stake in Airtel over time.”
Airtel currently has 491 million customers in 17 countries across South Asia and Africa. In India, Airtel plans to launch 5G services nationwide starting with key cities. The telco recently secured key 5G frequencies in a spectrum auction carried out by the Government of India.
Singtel is also considering whether to sell its cybersecurity business Trustwave Holdings, according to a recent report by Bloomberg.
The report revealed that the potential transaction will enable Singtel to raise $200 million to $300 million.
In 2015, Singtel acquired a 98% equity interest in U.S.-based Trustwave in a transaction valued at $810 million.
Singtel is currently focusing on the expansion of its 5G infrastructure in Singapore. The telco recently said that its 5G Standalone network currently covers over 95% of the country’s territory.
Singtel noted that the milestone comes more than three years ahead of the regulatory target for this level of coverage, which is at the end of 2025.
Singtel’s 5G SA network now covers more than 1,300 outdoor locations and over 400 building across Singapore.
Singtel announced the launch of its 5G SA network in the country in May of 2021.
