Singtel Said Planning $2 Billion Intouch, Bharti Stake Buys

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A pedestrian walks past a Singapore Telecommunications Ltd. store in Singapore.

Photographer: Nicky Loh/Bloomberg
  • Singtel investment in both companies likely to be in cash
  • New issuance to raise Temasek’s Singtel stake to about 55%

Singapore Telecommunications Ltd., the city-state’s biggest phone company, plans to spend about $2 billion to invest in Thailand’s Intouch Holdings Pcl and raise its stake in India’s Bharti Telecom Ltd., according to people with knowledge of the matter.

The planned investment is likely to be funded in cash, the people said, asking not to be named because the information is not yet public. Singtel also plans to issue new stock to its biggest shareholder, Temasek Holdings Pte, which will boost the Singapore state-owned investment firm’s stake in the phone company to about 55 percent from 51 percent, one of the people said.

The share purchases in the parent companies of the largest mobile-phone operators in India and Thailand would give Singtel a bigger foothold in the two markets. Singtel owns more than a fifth of Advanced Info Service Pcl, making it the biggest investor of the Thai mobile phone company after Intouch. It also owns a stake in Bharti Airtel Ltd. through Bharti Telecom, whose shareholders also include the Indian phone company’s Chairman Sunil Bharti Mittal and Temasek.

Following media reports that it’s planning to buy part of Temasek’s stake in Intouch, Singtel said Wednesday that it regularly explores and reviews business opportunities. Fitch Ratings said the same day that the telecom provider’s A+ credit rating would be at risk of being downgraded for the first time if Singtel buys the Intouch stake using debt since it would further weaken its net leverage.

Singtel and Temasek officials declined to comment on ”market speculation.” Officials at Intouch and Bharti declined to comment.

Singtel shares have risen 15 percent this year, compared with the 1.4 percent drop in the Singapore benchmark Straits Times Index.

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