Credit Suisse and Morgan Stanley are reportedly set to offer staple financing to help Singapore Telecommunications (SingTel) sell its Optus Satellite unit, according to Bloomberg citing persons familiar with the situation.
The banks were appointed in…
Credit Suisse and Morgan Stanley are reportedly set to offer staple financing to help Singapore Telecommunications (SingTel) sell its Optus Satellite unit, according to Bloomberg citing persons familiar with the situation.
The banks were appointed in mid-March as part of SingTel’s strategic review for the Australian satellite operator. Both strategic players and sponsors are understood to have expressed interest in the subsidiary.
An information memorandum regarding the sale of Optus Satellite, which has been valued at approximately US$2bn, will reportedly be sent out by the end of May.
SingTel declined to comment on the report.
However, in an interview with the Australian Financial Review, Kevin Russell, SingTel’s country chief officer for Australian and CEO of Optus’ consumer business, said that selling the business was not the only option and that the telco was also considering a potential IPO, spin-out transaction or indeed continuing to own the asset.
The strategic review of Optus Satellite comes as SingTel posted lower revenues from its Australian operations in Q4 fiscal 2012/13.
Optus, parent of Optus Satellite, reported a 5% drop in revenue compared with Q4 fiscal 2011/12 to A$2.17bn (US$2.15bn), “reflecting its strategy of strong cost management and yield improvement,” it said in a statement.
Optus Satellite operates a fleet of five spacecraft, with another satellite, Optus 10, scheduled for launch later this year.
Together with Thailand’s IPstar, Optus is providing interim services for Australia’s National Broadband Network Company (NBN Co), the PPP tasked with providing universal broadband services across the country.
NBN Co, which aims to provide a combination of fibre, wireless and satellite services, will use capacity from Optus until its own Ka-band spacecraft are launched by Arianespace in 2015.
Besides operating satellites, Optus is Australia’s second largest telco and is 100%-owned by SingTel.
