A KKR-SINGTEL consortium will invest S$1.75 billion in data-centre provider ST Telemedia Global Data Centres (STT GDC), in a deal said to be this year’s largest digital infrastructure investment so far in South-east Asia.
The initial S$1.75 billion investment by the consortium will be via redeemable preference shares with detachable warrants, global investment firm KKR said on Tuesday (Jun 18), in a statement issued jointly with Singtel and STT GDC.
Upon the exercise of the warrants in full, the investors will inject an additional S$1.24 billion, giving them a stake of 18.3 per cent in STT GDC, ST Telemedia said.
KKR’s stake will be approximately 14.1 per cent, and Singtel’s, about 4.2 per cent.
Arthur Lang, Singtel’s group chief financial officer, said: “We see digital infrastructure, particularly data centres, as a growth asset and a compelling investment, with the remarkable rise of the sector driven by rapid digitalisation and AI adoption around the world.”
He added: “This is a solid opportunity for Singtel to gain exposure to an established platform with a footprint in high-quality data centre markets, and which aligns with our… strategy to further scale our digital infrastructure business in collaboration with like-minded partners.”
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The consortium beat out New York alternative investment firm Stonepeak for the stake in STT GDC, which is one of Asia’s largest data-centre providers.
The consortium was created following an independent competitive process by ST Telemedia and STT GDC, which considered, among other things, the resulting consortium’s collective expertise and track record, financial strength, and proposed business strategy.
The proceeds of the investment will be used to advance STT GDC’s position in its markets, and to support its continuing international expansion and growth plans through organic and inorganic strategies.
KKR will make this investment from its Asia-Pacific Infrastructure Investors II Fund.
Following the transaction, ST Telemedia will continue to be the majority shareholder of STT GDC.
STT GDC has more than 95 data centres across 11 geographies and points of presence in over 20 major business markets.
Its data-centre portfolio has a total capacity of more than 1.7 gigawatt of IT load.
The closing of the deal is subject to the satisfaction of certain conditions precedent, including regulatory approvals.
