Singtel offload 3.3% Bharti Airtel stake for $1.6 billion

NEWS

The Singaporean operator says it will sell a 3.3% direct stake in the Indian telco to Bharti Telecom, a joint venture (JV) between Bharti Enterprises and Singtel

This week, Singtel have announced that it is selling a 3.3% direct stake in Bharti Airtel, raising $1.6 billion.

The sale to Bharti Telecom will take place through Singtel’s subsidiaries, Pastel Ltd and Viridian Ltd, leaving Singtel with a 29.7% total stake in Airtel, 19.2% of which is indirect via Bharti Telecom.

Bharti Telecom is co-owned by both Bharti Enterprises and Singtel, which own 50.56% and 49.44%, respectively. In turn, Bharti Telecom holds a 35.8% stake in Bharti Airtel.

“Bharti Enterprises and Singtel have agreed to work towards equalising their effective stake in Airtel over time,” noted Sunil Mittal, Chairman of Bharti Enterprises.

Singtel says the funds raised will be used to reduce the Group’s debt, as well as further enhance their 5G rollout.

“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,” said Singtel’s Group CFO, Arthur Lang. “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 monetisation opportunities that allow us to increase our return on invested capital and enhance total shareholder returns.”

The stake sale is expected to close in the next three months.

Singtel has been divesting of numerous assets in recent months, seeking to streamline its operations and focus on new revenue streams. Late last year, Singtel announced they would sell a majority stake in the tower unit of their Australian operator subsidiary, Optus, raising $1.3 billion. More recently, the company has sold its underperforming digital marketing company Amobee for $239 million, with rumours last week suggesting that Singtel’s cybersecurity unit Trustwave could soon follow.

In contrast, however, the company is still investing heavily in the next generation of telecoms technology, earlier this month pumping a fresh $100 million into its tech start-up investment arm, Innov8, a company that has already produced four ‘unicorns’ in the past decade.