Singtel increases stake in AIS parent company

News

Singtel’s Global Investment arm is increasing its stake in Intouch Holdings to 24.99%, purchasing S$330 million ($237 million)-worth of shares from Temasek subsidiary Anderton Investments

Today, Singtel has announced that it is increasing its stake in Intouch Holdings, the parent company of Thai mobile operator Advanced Info Service (AIS), acquiring a further 3.78% stake from Temasek.

The purchase, worth a roughly $237 million, will increase the Singaporean operator’s stake from 21.21% to 24.99%.

According to Singtel, the motivation for the stake increase is AIS’s continued strong performance, with the Thai operator capitalising on a surging demand for cloud, data centre and ICT solutions in the enterprise space.

"Intouch has been delivering good returns supported by consistently strong execution from AIS in one of the region’s most attractive markets,” explained Singtel Group CEO Yuen Kuan Moon. “Our increased investment deepens our partnership with Intouch’s largest shareholder Gulf Energy, and is part of our strategy of actively recycling capital to invest for growth and shareholder returns. At the same time, it demonstrates our confidence in AIS’ potential to build on its position as the mobile operator of choice and become the leader in digital and enterprise services.”   

The transaction will be completed by the end of the month.

Intouch Holding’s is a company with an interesting history closely intwined with Thailand’s political landscape. The business was founded as Shinawatra Computer Service and Investment back in 1983 by Thaksin Shinawatra. Two years later, in 1985, Shinawatra founded a computer rental business called AIS, which would grow to become Thailand’s largest mobile company.

By the turn of the millennium, Thaksin, now one of the richest men in Thailand, had become a successful politician and was elected Prime Minister in February 2001. Re-elected in 2005, Thaksin’s time in office was mired in controversy, from his violent ‘War on Drugs’ to various allegations of abusing his power. 

One such criticism centred around Thaksin’s family ownership of Shinawatra Computer Service and Investment, which had been rebranded as Shin Corporation (ShinCorp) in the late 1990s, with detractors suggesting that the Shinawatra family’s 49% stake represented a major conflict of interest for the Prime Minister. As a result, the Shinawatra family sold the stake to Singaporean state-investment fund Temasek, netting the family around $1.8 billion tax free. 

The sale caused enormous controversy within the media, with Thaksin’s opponents critical of his handing over such a large stake in a national infrastructure firm to a foreign firm, as well as having appeared to dodge capital gains tax, though this was later ruled legal. 

Ultimately, this sale was one of the key events leading to Thanksin’s political downfall, with the Prime Minister ultimately removed from office during a military coup by the Royal Thai Army in late 2006, following almost a year of civil unrest. 

Shin Corporation was rebranded as Intouch in 2011.

Since then, Intouch has moved to distance itself from its problematic legacy. Today, the holding company owns a roughly 40% stake in AIS, as well as a similar stake in Thai satellite operator Thaicom and smaller in 26 other businesses covering everything from digital media and fintech to eCommerce and health tech.

In related news, this week Singtel has announced further decentralisation of its organisational structure, giving its Australian subsidiary Optus direct control of the Optus Enterprise division from July 1 2022.