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Singtel has dismissed the possibility of selling its Australian subsidiary, Optus.

ByYasmeeta Oon

Apr 15, 2024
Singtel has dismissed the possibility of selling its Australian subsidiary, Optus.

Singtel has dismissed the possibility of selling its Australian subsidiary, Optus.

Singapore – Singapore Telecommunications (Singtel), the leading telecom operator in Southeast Asia, has reaffirmed its stance on Wednesday, dismissing rumors of an imminent deal to divest its Australian subsidiary, Optus. The company’s announcement comes amidst recent market speculation and conflicting reports regarding the potential sale.

  • Singtel, majority-owned by Singapore’s sovereign wealth fund Temasek, has rejected claims made in a March report by the Australian Financial Review (AFR) suggesting a possible sale of Optus to Canada’s Brookfield for a reported sum of up to $12 billion.
  • Reuters previously cited sources familiar with the matter, reporting that Singtel was engaged in advanced discussions with Brookfield over a significant stake sale in Optus, further fueling speculation surrounding the deal.
  • Despite initial market optimism, Singtel’s shares took a hit on Wednesday, dropping by 3.15% to S$2.46 before trading was temporarily halted pending an official announcement.
  • The halt was initiated following multiple reports indicating the cessation of talks between Singtel and Brookfield due to disagreements over valuation and pricing terms for the proposed transaction.

Financial Snapshot:

SubsidiaryContribution to Singtel’s Business
Singtel Singapore50%
Bharti AirtelMinority Stake
TelkomselMinority Stake
Globe TelecomMinority Stake

Key Developments and Response:

  • Singtel, in its annual report, highlights that its Singaporean operations and Optus collectively contribute half of its business, while the remainder consists of minority stakes in telecom operators across Asia.
  • The company has urged caution among shareholders and potential investors, advising them to refrain from relying solely on media reports regarding Optus until definitive announcements are made.
  • Notably, Optus faced public backlash in November following a widespread network outage affecting over 10 million Australians. The incident triggered an investigation, led to the departure of the then Optus CEO, and incurred a fine of A$1.5 million ($977,100.00).

The uncertainty surrounding the potential divestment of Optus has led to heightened market speculation and volatility in Singtel’s stock price. Investors are closely monitoring developments and awaiting clarity on the company’s strategic decisions regarding its Australian subsidiary.

Singtel’s announcement underscores its commitment to transparency and prudent decision-making amidst ongoing market speculation. As discussions regarding the potential divestment of Optus continue, stakeholders are advised to exercise caution and await formal announcements from the company.

With the telecommunications landscape evolving rapidly, Singtel remains focused on navigating challenges and leveraging opportunities to drive sustainable growth and shareholder value.

As the situation unfolds, Singtel’s strategic direction and future prospects will be closely scrutinized by investors and industry observers alike.

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Featured Image courtesy of The Star

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.

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