Singapore’s state investment company Temasek Holdings has been looking to sell its 41.6% stake in Thai telecoms and satellite group Shin Corp, valued at US$3.1bn, according to multiple reports.
The sovereign wealth fund held talks with telecoms…
Singapore’s state investment company Temasek Holdings has been looking to sell its 41.6% stake in Thai telecoms and satellite group Shin Corp, valued at US$3.1bn, according to multiple reports.
The sovereign wealth fund held talks with telecoms incumbent Singapore Telecommunications (SingTel) late last year but discussions stalled due to the turbulent political climate in Thailand, people familiar with the matter were quoted as saying.
Temasek declined to comment while Shin Corp and SingTel could not be reached prior to the press deadline.
Shin Corp, which operates under the Intouch brand, has a 40% stake in the country’s largest mobile operator AIS and a 41% interest in satellite company Thaicom.
If Temasek were to sell Shin Corp to SingTel, it would retain an indirect stake in the telco as it also owns a majority 52% of SingTel.
SingTel is already present in Thailand via its 23% holding in AIS. It also controls Australian telecoms and satellite operator Optus and has stakes in several major players across India, the Philippines, Indonesia and Bangladesh.
Over the years, Temasek has been reducing its influence over Shin Corp, partly to bring the free float closer to the legal requirement of 15%. This latest potential sale, though, is seen more as part of a wider move to consolidate its portfolio of companies.
For SingTel, an acquisition would be consistent with its previously-announced strategy to “increase shareholdings in existing associates.” Acquiring Shin Corp would up its indirect stake in AIS to 40%.
Temasek was part of a group of Asian investors that bought a controlling stake in Shin Corp from its founder and former Thai prime minister, Thaksin Shinawatra, in 2006. The deal sparked controversy at the time as the Shinawatra family had been accused of insider trading and tax evasion.
Later that year, the Shinawatra government was overthrown in a military coup and Thaksin was found guilty of corruption before fleeing the country.
Thailand’s current prime minister is Thaksin’s sister, Yingluck Shinawatra, and there have been ongoing anti-government protests in the country amid concerns that Thaksin still has an influence on Thai politics.
SingTel finalising S$1.8bn loan
Meanwhile, SingTel is reportedly close to securing a S$1.8bn (US$1.43bn) three-year revolving credit facility from a consortium of local and international lenders.
Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi UFJ, Citi, DBS Bank and HSBC are among the banks involved in the refinancing, which is expected to close by the end of March, according to a Basis Point report.
In June 2011, SingTel inked a three-year S$2.16bn (US$1.7bn) revolving credit facility with 12 banks.
Proceeds from the new facility may be used for general corporate purposes, including M&A deals.
