The buyback will be delivered over the course of three years until financial year 2028 and involves the purchase of shares in the open market that will subsequently be cancelled
[SINGAPORE] Local telecommunications giant Singtel on Thursday (May 22) has authorised its first share buyback programme of up to S$2 billion, as part of the company’s capital management strategy, in addition to incorporating its wholly owned subsidiaries in Singapore such as Singtel International Digital Services (IDS) and IDS Cloud.
The programme, which will be delivered over the course of three years until financial year 2028, involves the purchase of shares in the open market that will subsequently be cancelled. The buybacks will be carried out at the management’s discretion and is subject to market conditions. This programme is also on top of share buybacks for the group’s employee share schemes.
The group said that funding for the share buybacks will be underpinned by excess capital from the group’s asset recycling proceeds.
In May 2024, Singtel set a mid-term asset recycling target of S$6 billion under its Singtel28 growth plan which it is now raising to S$9 billion.
The value realisation share buyback programme is the latest capital management initiative undertaken by Singtel, following a change in dividend policy in May 2024 to include a value realisation dividend in addition to a core dividend. The value realisation dividend was introduced to return excess capital to shareholders.
Singtel’s value realisation share buyback programme will be administered in accordance with Singtel’s Share Purchase Mandate, which allows the purchase of up to 5 per cent of its total issued shares (excluding treasury shares and subsidiary holdings) and is subject to shareholder approval at each annual general meeting.
As for its wholly owned subsidiaries, Singtel International Digital Services (IDS) was incorporated on Feb 6 with an issued and paid-up capital of S$2. Its principal activity is that of a holding company.
IDS Cloud on the other hand was incorporated on Feb 7, with the same issued and paid-up capital of S$2, where its principal activities are the sale and provision of cloud services and related solutions.
Shares of Singtel closed 1.1 per cent or S$0.04 higher at S$3.85 on Wednesday before the news.
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