SingTel's Belgacom stake falls
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SingTel bought its stake in Belgacom in March 1996.
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SINGAPORE (Reuters) -- Southeast Asia's largest phone company, Singapore Telecommunications, says it has cut its stake in European telecoms group Belgacom through an affiliate, raising 92.4 million euros ($115 million).
The fall in SingTel's effective stake to 11.72 percent from 12.15 percent comes as Belgium's dominant carrier prepares for an initial public offering, possibly after the first quarter of 2004, that could be one of Europe's biggest in recent years.
Expectations that Belgacom's float will generate a handsome special dividend at SingTel has helped fuel a 58 percent surge in the state-controlled carrier's stock price this year, compared to a 32 percent rise in the local Straits Times index.
SingTel's shares were up 1.03 percent at S$1.97 on Wednesday, their highest since September 2001.
"There's a high possibility of a dividend payout next year which should help support its share price," said Brenda Lee, analyst at Daiwa Institute of Research.
Preparing for the float, Belgacom repurchased about three percent of its shares held by ADSB Telecommunications B.V., a holding company of minority stakeholders such as SingTel, U.S. phone operator SBC Communications Inc and Denmark's TDC.
That shaved ADSB's stake in Belgacom, one of Europe's smallest former telecoms monopolies, to 48.4 percent from 50 percent less one share, SingTel said.
Battling heavy competition at home, where four out of five people own mobile phones, SingTel has spent S$17 billion in high-growth Asian investments in the past four years and in the bigger Australian market.
SingTel paid around S$840 million in March 1996 for its 12.15 percent Belgacom stake. That investment, some analysts say, could triple in value when the European telecoms group goes to market.
Belgacom and government officials have declined to put a value on Belgacom's planned listing, but analysts calculate it could fetch an overall valuation of up to 11 billion euros.
Belgacom's foreign investors had been driving talks to bring the carrier to the market to unload their stakes.
"The financial impact of the above transactions cannot be ascertained at this stage and SingTel will provide an update at a later stage," SingTel said in a statement Wednesday.
The fall in its Belgacom stake was triggered after SingTel ADSB (Netherlands) B.V.'s holding in the holding company ADSB fell to 26.9 percent from 27 percent in a share repurchase exercise.
"The unaudited net book value of the shares to be sold by SingTel ADSB as of 30 September 2003 is approximately S$60 million. The gain to SingTel will be partially reduced by a loss on dilution arising from the above transactions," SingTel said.
Belgacom is cutting costs and investing in new services to compensate for a decline in voice services and a rise in competition from new market entrants.
Copyright 2003
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
