Private equity firms eye Optus Satellite acquisition
29 May 2013 | Kavit Majithia
Private equity firms KKR and Carlyle are reportedly lining up bids for SingTel’s Australian unit Optus Satellite.
The business is valued at approximately $1.9 billion, according to present market value.
SingTel is looking to make the divestment to free up cash and compete more effectively in key markets of Singapore and Australia through faster growing businesses.
Reuters reports that France’s Eutelsat Communications, Blackstone Group and Providence Equity Partners are also expected to bid, with SingTel inviting first round offers by June 14.
KKR and Carlyle are both discussing deal financing with banks, according to sources close to the situation.
The Singapore-based operator is hoping the auction will receive a further boost from debt funding initiatives for the US, which is being made available by Credit Suisse and Morgan Stanley.
The banks are providing loans of up to A$1.7 billion to fund the acquisition for prospective buyers.
Optus Satellite will launch its Optus 10 satellite this year, and it will be the company’s sixth satellite in operation.
SingTel acquired the satellite arm when it acquired Optus in 2001 for $14 billion, but has struggled to increase earnings recently due to slow growth in the Singaporean and Australian mobile markets.
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