Singtel unlocks S$0.95 billion from divestment of a 0.8% direct stake in Airtel

Singtel has unlocked another S$0.95 billion with the sale of a 0.8% direct stake in regional associate Airtel to US-based investment firm GQG Partners. The resultant gain from the sale is estimated to be S$0.7 billion.

This transaction is the latest in the Singtel Group’s capital recycling efforts to unlock value from its assets, bringing the total capital recycled to S$8 billion since its strategic reset in 2021. This has allowed the Group to fund the growth of its data centre and IT services, as well as reduce net debt by S$3.2 billion as of end September 2023. The Group has also returned S$0.8 billion in special dividends to shareholders from capital recycling, contributing to cumulative dividends of S$5.2 billion paid out to shareholders since April 2022.

“We’re pleased to have raised S$0.95 billion, while adding a marquee name to Airtel’s share base. The Group is now in an even stronger position to execute our disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns for our shareholders.” Arthur Lang, Singtel Group CFO

Mr Arthur Lang, Singtel Group CFO said, “We’re pleased to have raised S$0.95 billion, while adding a marquee name to Airtel’s share base. The Group is now in an even stronger position to execute our disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns for our shareholders. Last November, we raised our dividend policy to between 70% and 90% of underlying net profit and are on track to pay at the upper end of that range this financial year, barring any unforeseen circumstances. We will look at actions to improve total shareholder returns via sustainably growing dividends and share price appreciation. We believe the current share price does not reflect the intrinsic value or growth potential of the Group.”

“Airtel continues to see steady growth across all its businesses and has been rewarded with strong market valuations. We believe there’s more room for growth given India’s accelerated digital transformation and we intend to stay invested for the long term while working with Bharti Enterprises to equalise our effective stake in Airtel over time,” he added.

Singtel has been a strategic investor in Airtel, one of the world’s top three mobile operators with over 500 million customers in 17 countries, for more than 20 years. After the transaction, Singtel will hold an effective stake of 29.0% in Airtel, worth an estimated S$33 billion. In 2022, Singtel sold a 3.3% direct stake in Airtel for approximately S$2.54 billion to illuminate the value of its holdings in Airtel.

CT Bureau