SINGAPORE: Singapore Telecommunications Ltd will trim 3.3% of its direct stake in India’s Bharti Airtel Ltd to raise about S$2.25 billion (US$1.6 billion), which it will use to finance its 5G operations and expansion.
Southeast Asia’s biggest telecom operator will sell its stake to Bharti Telecom Ltd, its venture with Bharti Enterprises Ltd, the Singapore company said in a statement Thursday. Singtel is expected to own an effective stake of 29.7% in Bharti Airtel after the deal and have a net gain of about S$600 million.
Singtel has been streamlining its portfolio as it focuses on 5G operations and seeks new growth engines. It’s disposing off an advertising platform and is said to be weighing options including selling its cyber security business Trustwave Holdings Inc and a possible stake sale in some fibre assets.
Singtel is not the only operator divesting assets. Vodafone Group Plc is divesting bits of its businesses and Japan’s NTT Ltd is said to be mulling a sale of its controlling stake in an IT services firm.
Apart from funding 5G and growth in the next few years, the deal will “put us in a strong position to grow our dividends in a sustainable way”, Arthur Lang, Singtel’s group chief financial officer, said in the statement.
“We remain committed long-term investors having invested approximately S$1.3 billion in Airtel over the last three years,” he said.