Singapore Telecommunications
on Thursday said it has sold a 0.8% stake in
Bharti Airtel
for S$950 million (nearly $711 million) to
US investment firm
GQG Partners. he deal marks the latest effort by
Southeast Asia’s largest telcom operator
to recycle capital, bringing the total to S$8 billion since its strategic reset in 2021.
After the transaction,
SingTel
will hold an effective stake of 29% in Airtel, which would be valued at around S$33 billion.
The telco has been selling shares in Airtel for a while, including a direct 3.3%
stake sale
for S$2.5 billion in 2022. The group said it expects to record a gain of S$700 million from the stake sale, without elaborating on the difference with the divestment price.
SingTel has been making continuous efforts to improve shareholder returns, such as raising dividend to between 70% and 90% of underlying net profit in November last year. “Looks like a good move in terms of timing with Bharti Airtel share price up 56% in one year even exceeding consensus street target price of Rs 1,175,” said Sachin Mittal, analyst at DBS.
“Singtel’s market cap is around only S$39 billion while the value of its stake in Bharti alone is S$33 billion,” Mittal added.