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18Th Aug 2016
Singapore Telecommunications (Singtel)
on Thursday said it is acquiring 7.39 per cent additional stake in the holding
arm of India's largest telecom company Bharti Airtel for around $650 million. The Total Investment
& Insurance Solutions
The development, as per a series of
regulatory filings across countries, is a part of a larger deal struck by
Singtel with Temasek to acquire 21 per cent in Thailand-based Intouch Holdings
and 7.39 per cent of Bharti Telecom for a total consideration of $1.8 billion.
"The aggregate consideration
payable for the Bharti Telecom sale shares is approximately Singapore Dollars
884 million (US $658 million)," Singtel added about the deal, which comes
just ahead of India's largest-ever spectrum auction to date.
"Singtel currently already has
an interest of approximately 39.78 per cent in the share capital of Bharti
Telecom and an interest of approximately 15.01 per cent in the share capital of
Bharti Airtel." The Total Investment & Insurance Solutions
Following the acquisition of the
Bharti Telecom sale shares, Singtel's interest in the share capital of Bharti
Telecom will increase from approximately 39.78 per cent to 47.17%.
"Singtel will pay Temasek Thai
Baht 60.83 for each share of Intouch and Rs 235.62 for each share of Bharti
Telecom. The transaction is subject to the fulfilment of certain conditions
precedent, including shareholder and relevant regulatory approvals, and is
expected to be completed by December 2016," the statement added.
It will be satisfied in full in cash
in Singapore Dollars on completion, and will be funded in part through the
utilisation of the cash proceeds from the allotment and issue of the new shares
under the placement agreement, with the balance being funded by internal cash
and short-term debt.
The rather complex deal also
involves a share placement of 386 million new Singtel shares to Temasek
totalling Singapore Dollars 1.605 billion at a price of Singapore Dollars 4.16
per new share.
The Total Investment & Insurance Solutions
Singtel said Bharti Airtel is
India's largest telecommunications company with operations in 18 countries
across South Asia and Africa and that it has been an associate of its group
since 2000. It said the acquisition of stake in Bharti Telecom and Intouch
Holdings, which is the biggest shareholder in Thailand's largest mobile phone
company, Advanced Info Services, further consolidates its economic interests in
the region.
The Total Investment & Insurance Solutions
"Singtel has been a strategic
partner to both Advanced Info Services and Airtel for more than 15 years. We
have built deep and trusted relationships, worked well together through the
years, sharing knowledge and expertise and we have grown together, from strength
to strength," said Singtel Group Chief Executive Chua Sock Koong.
"Today, they have a combined
mobile customer base of more than 380 million across Asia and Africa. This is a
unique opportunity for us to deepen our relationships with two great market
leaders," Chua added. The Total Investment & Insurance
Solutions
The company said both India and
Thailand are fundamentally attractive markets, reaping the benefits of rapidly
increasing smartphone penetration and mobile data adoption by a growing middle
class.
The Total Investment & Insurance Solutions
"Both Advanced Info Services
and Airtel are well-positioned to benefit from these trends. The recent mobile
spectrum auctions in Thailand and ongoing industry consolidation in India have
strengthened their competitive positions. They have also built for the future,
securing significant spectrum for the long term and investing extensively in 3G
and 4G networks and services."
Bharti Airtel declined comment on
the deal, and only posted the identical press statement of Singtel in the
regulatory filing to Indian stock exchanges. The shares of Bharti Airtel closed
at Rs 352.40 on the BSE on Thursday, up Rs 7.15 or 2.07 per cent.
Besides mobile telephony, the New
Delhi-based Bharti group has interests in diverse industries, telecom towers
infrastructure including mobile gaming, retail, insurance, branded farm
produce, realty and e-learning.The Total Investment & Insurance
Solutions
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