SingTel sells Warid stake to Abu Dhabi Group
SingTel has agreed to sell its 30% stake in Pakistani operator Warid Telecom to a unit of the Abu Dhabi Group for $150 million.
"Excluding the value of any future transaction interest, the estimated loss on disposal will be approximately S$230 million ($186 million), including the foreign currency translation losses and transaction costs," SingTel said in a stock market filing.
Abu Dhabi is Warid’s majority shareholder through Warid Telecom International and will regain full ownership of the company as a result of today’s deal.
Warid had approximately 10.5% wireless market share in Pakistan in September 2012 placing it behind CMPak, Pakistan Telecommunications Mobile, Telenor Pakistan and Mobilink in terms of subscribers.
"Despite the fact that SingTel will book a loss of $186 million on the disposal, the deal is credit positive as it absolves SingTel of a guarantee of $90 million thereby reducing its gross adjusted debt by the same amount. At the same time, SingTel will also be released of its equity undertaking of approximately US$51 million," said Nidhi Dhruv, a Moody's Analyst and also the Lead Analyst for SingTel.
"Furthermore, Moody's does not foresee any significant impact to SingTel's EBITDA as Warid represents only a fraction of the Group's operations and has yet to make any cash contribution through dividend payments to SingTel's EBITDA," he added.