Singtel to sell stake in Warid Telecom
SingTel said in a statement that it will take an estimated loss of about 230 million Singapore dollars (US$186 million) on the transaction. SingTel had been looking to sell the stake in the loss-making company since July when it reclassified Warid as an ‘asset held for sale’ and ceased accounting for its stake in the operator.
The planned sale to Abu Dhabi’s Warid Telecom Pakistan LLC–which currently owns the other 70% of the phone operator–will bring to a close an investment that never generated returns for SingTel since it paid US$758 million in 2007 to buy the stake, then describing the operator as a ‘natural fit’ for itself.
Warid is a part of the Abu Dhabi Group, led by Sheikh Nahayan Mabarak Al Nahayan, a member of the emirate’s ruling family.As a part of the deal, SingTel will receive US$150 million in cash and a 7.5% share of proceeds from any future sale or public offering of Warid, according to the company’s statement to the Singapore Exchange.
“The sale of SingTel’s stake in Warid follows a strategic review of the investment, its competitive position and opportunity,” SingTel said in the statement without elaborating.
SingTel holds significant stakes in five other foreign mobile operators: India’s Bharti Airtel Ltd . (532454.BY), Indonesia’s Telkomsel, Thailand’s Advanced Info Service PCL (ADVANC.TH, AVIFY), the Philippines’ Globe Telecom Inc. (GLO.PH) and Pacific Bangladesh Telecom.
Its share of pretax profit from its regional mobile associates rose 17% to S$549 million, SingTel said in November when announcing its fiscal second-quarter results.
Telkomsel, Advanced Info and Globe recorded stronger operational performances, though that was partially offset by lower earnings from Bharti Airtel and weaker regional currencies.
SingTel’s net profit in the quarter that ended Sept. 30 was 1.6% lower than in the previous year at S$868 million. The company will report earnings for its fiscal third quarter on Feb. 14, it said in a separate statement on Tuesday.