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Investing.com– Singapore Telecommunications Ltd (Singtel) (SGX:STEL) said on Thursday it will sell a 3.3% stake in India’s Bharti Airtel Ltd. (NS:BRTI) to an Indian joint venture for about 2.25 billion Singapore dollars ($1.6 billion).
Shares of the firm rose 2.2% after the announcement. Singtel will recognize a net gain of roughly S$600 million from the sale, it said in a press release.
Singtel, Southeast Asia’s largest telecommunications company, said that two of its units- Pastel Ltd and Viridian Ltd- entered into an agreement with Bharti Telecom- a joint venture between Singtel and Bharti Enterprises- for the sale. The two units will transfer a combined 198 million shares to Bharti Telecom.
Singtel will hold a 29.7% stake in Airtel after the divestment, worth S$22 billion.
The company intends to apply the proceeds from the sale to fund its 5G initiative and other expansion projects in the coming years.
The sale also comes as part of a broader restructuring by Singtel. The firm had last month offloaded part of its stake in Airtel Africa Plc (LON:AAF), and had also announced plans to sell its digital marketing unit Amobee.
“As long-term strategic investors and partners, the value of our stakes in our regional associates has risen substantially over the years but has not been properly reflected in our share price. This sale in Airtel will be our first ever and seeks to address this gap,” Singtel Chief Financial Officer Arthur Lang said.
Bharti Airtel is one of the largest telecom operators in India, and covers about 17 countries. The firm is also planning a push into 5G infrastructure this year.
