SingTel sells 0.8% stake in Bharti Airtel for $711 million

Singapore Telecommunications on Thursday said it has sold a 0.8% stake in India’s Bharti Airtel for S$950 million (nearly $711 million) to U.S. investment firm GQG Partners. The deal is the latest of Southeast Asia’s largest telcom operator’s efforts to recycle capital, which brings the total to S$8 billion since its strategic reset in 2021.

SingTel, through its unit Pastel, sold 49 million or 0.8% of the outstanding shares in Airtel, also effectively reducing its stake in the telecom operator by 0.8 percentage points, it said in a statement. Post 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$2.54 billion in 2022.”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,” SingTel finance chief Arthur Lang said.

The Group said it expects to record a gain of around S$700 million from the stake sale, without elaborating on the difference with the divestment price. SingTel has been making continuous efforts to improve return to shareholders, raising its dividend policy to between 70% and 90% of underlying net profit in last November.

The firm said it is on track to pay dividend at the upper end of the range in fiscal 2024. Lang also indicated that the current share price of SingTel “does not reflect the intrinsic value or growth potential of the Group. “SingTel shares are currently trading 0.4% higher at S$2.35 a peice. Airtel shares are up 0.7% at 1,201.95 rupees per share. Airtel and GQG Partners did not immediately reply to Reuters’ request for comments.