SINGTEL has sold 49 million of its shares in Bharti Airtel, amounting to a 0.8 per cent stake in its Indian associate, for 1,193.70 rupees per share to US-based investment firm GQG Partners.
On Thursday (Mar 7), the telecommunications provider estimated the deal to result in gross proceeds of about S$950 million.
It expects to net a gain of about S$700 million from the transaction, which was conducted on the National Stock Exchange of India and will be settled in rupees.
The sale shares are estimated to have a carrying value of about S$100 million. Their latest open market value stood at S$930 million based on the volume-weighted average price of Airtel’s shares on BSE and the National Stock Exchange of India.
Following completion of the sale, Singtel’s effective stake in Airtel will decrease to 29 per cent from 29.8 per cent.
Singtel group chief financial officer Arthur Lang said he believes Airtel has “more room for growth”.
The group intends to remain invested in its India associate over the long term, while also working with Bharti Enterprises to equalise its effective stake in Airtel over time.
Commenting on the deal, he said that the group is now in an even stronger position to execute its disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns for its shareholders.
Lang added that it intends to improve total shareholder returns in the form of sustainably growing dividends and share-price appreciation.
In his view, Singtel’s current share price “does not reflect the intrinsic value or growth potential of the group”.
The counter was up S$0.01 or 0.4 per cent at S$2.35 as at the midday trading break.
