South East Asia giant Singapore Telecommunications (SingTel)’s NetLink Trust has agreed to acquire fibre network operator OpenNet in a deal worth about S$126m (US$98.3m).
OpenNet, responsible for building and operating the fibre platform for…
South East Asia giant Singapore Telecommunications (SingTel)’s NetLink Trust has agreed to acquire fibre network operator OpenNet in a deal worth about S$126m (US$98.3m).
OpenNet, responsible for building and operating the fibre platform for Singapore’s next generation nationwide broadband network (Next Gen NBN), announced that an application has been filed with the Infocomm Development Authority of Singapore (IDA).
The application seeks regulatory approval for SingTel’s unit CityNet, the trustee-manager of NetLink Trust, to acquire 100% of OpenNet from current shareholders Axia Asia, SPH Net, SPT Net and SingTel Interactive. The IDA will hold a public consultation as part of the approval process.
SingTel has a 100% economic interest in NetLink Trust but says it has no effective control over the trust.
In its own statement, Canada-based Axia NetMedia explained that its subsidiary Axia Asia along with SPH and SPT have agreed to sell their combined 70% stake in OpenNet to CityNet. AxiaAsia will offload its approximate 30% stake for a cash consideration of about S$38m. This implies SPH will sell its 25% stake for about S$31.2m and SPT its 15% stake for S$19m, valuing the whole agreement at S$88.2m (US$68.8m).
SingTel also released a statement explaining its wholly-owned subsidiary SingTel Interactive has agreed to sell its approximate 30% stake in OpenNet to CityNet for a cash consideration of S$37.8m. This brings the total OpenNet deal value to about S$126m (US$98.3m).
SingTel explained that, upon completion of the two transactions, NetLink will become the sole owner of the Next Gen NBN fibre network.
The Singaporean company also said it will end its role as OpenNet’s key contractor for installing and maintaining the Next Gen NBN fibre network within 12 months. In addition, SingTel will reduce its stake in NetLink Trust to less than 25% by April 2018. The telco originally agreed to do this by April 2014 but said today the extension gives NetLink time to integrate Next Gen NBN operations and assets.
Axia NetMedia chairman and CEO Art Price said his company accepted the purchase offer as OpenNet has achieved its primary mandate of deploying a “ubiquitous” fibre network in Singapore, partners SPH and SPT wanted to sell based on this achievement, its own preference for holding majority stakes and having alternative uses for the capital currently invested in Singapore.
SingTel led the OpenNet consortium that won the ultra high-speed broadband network tender in the city state in 2008. OpenNet describes Next Gen NBN as “the world’s first nationwide all-optical fibre platform” and says it is capable of delivering speeds of 1 Gbps and above to homes, businesses and other premises. OpenNet’s network passes about 1.2 million residential and 26,000 commercial premises.
