Singtel to unlock S$2.25 billion with 3.3% Airtel stake sale

10 October 2022

Singtel’s wholly owned subsidiaries have entered into a share purchase agreement to sell a 3.3% direct stake in Airtel to Bharti Telecom by 23 November 2022.

The sale will unlock approximately S$2.25 billion as part of Singtel Group’s capital recycling strategy. This move is expected to achieve approximately S$0.6 billion in net gain on divestment for Singtel.

The decision follows several recent capital management initiatives to rebalance and optimise Singtel’s associates portfolio, including an increase in stake in Intouch Holdings, the parent company of Singtel’s regional associate AIS, and a partial divestment of Airtel Africa.

“As long-term strategic investors and partners, the value of our stakes in our regional associates has risen substantially over the years but has not been properly reflected in our share price,” said Arthur Lang, Singtel’s group chief financial officer. “This sale in Airtel will be our first ever and seeks to address this gap by illuminating the sizeable value of our holdings in Airtel. It is also part of our capital management approach to take monetisation opportunities that allow us to increase our return on invested capital and enhance total shareholder returns. With this transaction, we will raise over S$2 billion which will help to fully meet the Group’s needs for 5G and growth initiatives in the next few years, and put us in a strong position to grow our dividends in a sustainable way in line with our dividend policy.”

After the transaction is complete, Singtel Group is expected to own a 29.7% stake in Airtel, valued at approximately S$22 billion. This comprises a 19.2% indirect stake through Bharti Telecom and a 10.5% direct stake.