Several financial sponsors are reportedly considering bidding for the Australian satellite unit of Singapore Telecommunications (SingTel), valued at A$2bn (US$1.9bn).
Among the firms rumoured to be interested in Optus Satellite are KKR, Carlyle Group,…
Several financial sponsors are reportedly considering bidding for the Australian satellite unit of Singapore Telecommunications (SingTel), valued at A$2bn (US$1.9bn).
Among the firms rumoured to be interested in Optus Satellite are KKR, Carlyle Group, Blackstone Group and Providence Equity Partners.
KKR and Carlyle are currently discussing financing with banks, according to a Reuters report citing people familiar with the situation.
KKR, Blackstone and Providence declined to comment on the speculation while Carlyle could not be reached for comment. But an analyst told SatelliteFinance that the reported interest of those PE firms is not surprising as several of them are looking to boost their presence in Australia.
France-based satellite operator Eutelsat is also listed among the potential suitors and has reportedly lined up a corporate adviser. Both Eutelsat and SingTel declined to comment.
An information memorandum regarding the sale of Optus Satellite was sent on 27 May and SingTel expects first-round offers by 14 June, two Reuters sources were quoted as saying.
Meanwhile, Credit Suisse and Morgan Stanley are set to offer a A$1.7bn (US$1.64bn) staple financing to help SingTel sell Optus Satellite.
The banks were appointed in mid-March as part of SingTel’s strategic review for the satellite operator.
The review came as SingTel posted lower revenues from its Australian operations in Q4 fiscal 2012/13. Optus, parent of Optus Satellite, is Australia’s second largest telco and is 100%-owned by SingTel.
The company 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, which already has five spacecraft, will soon operate 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 in 2015.
Besides SingTel, another Asian telecoms operator might sell off its satellite operations this year. South Korea’s KT Corp recently spun off its satellite assets in a move seen as a step towards an eventual sale.