Singtel rules out impending deal to sell Australian unit Optus

Singapore Telecommunications (Singtel) on Wednesday (April 3) ruled out any impending deal to sell its Australian mobile network operation Optus following reports that talks for a potential stake divestment had fallen off.

Southeast Asia's largest telecom operator, Singtel sought a trading halt after its shares sank 3.15 per cent to $2.46. The company then reiterated that there was no Optus divestment deal. Its shares were last down 3.9 per cent.

Earlier in the day, reports said talks had ended for Singtel to divest a 20 per cent stake in Optus as the parties were unable to agree on certain terms involving the valuation and price aspect of a possible transaction.

Singtel, majority owned by Singapore sovereign investor Temasek, in March denied an AFR report that it was offloading Optus to Canada's Brookfield for up to US$12 billion (S$16.2 billion).

Reuters had reported that the company was in advanced talks over a "significant" stake sale to Brookfield, citing a person with direct knowledge of the matter.

Brookfield declined to comment when contacted by Reuters on Wednesday.

Optus has been one of Singtel's largest investments overseas though Australia's second-largest telecommunications group recently drew public ire after a 12-hour network blackout affected more than 10 million Australians.

"Optus' current return on invested capital is bit too low to monetise at this stage, as there is no urgent need of cash at Singtel," said Sachin Mittal, an analyst at DBS.

Around half a million workers at California fast food chains began receiving a US$20-an-hour minimum wage this week.

"It is better to improve Optus first via cost cuts in the near term and mobile tariff hikes in the medium term before divesting a stake."

Singtel asked its shareholders to "exercise caution" in their review of reports relating to Optus while dealing with its shares.

Singtel's Singaporean operations and Optus account for half of its business while the rest comprises minority stakes in several telcos including Bharti Airtel, Indonesia's Telkomsel and the Philippines' Globe Telecom.

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