SingTel yet to decide on SingPost listing
SINGTEL has invited investment bankers to submit proposals on listing its subsidiary Singapore Post (SingPost), among other options, but no decision has yet been made.
In a statement to the Singapore Exchange (SGX), SingTel said that it had, on an ongoing basis, carried out strategic reviews of its subsidiaries.
These included SingPost which is involved in postal, telecom and agency services.
‘There are ongoing discussions with investment bankers on the various options. However, no decision has been made,’ said SingTel.
It said it would make an announcement ‘when appropriate’.
It is understood that the proposals were submitted last week. Other options presented included a possible merger-and-acquisition scenario involving SingPost.
Analysts, meanwhile, said that a public float of SingPost, expected in about a year’s time, would be relatively small compared to SingTel’s own $4 billion public float in 1993 and PSA Corp’s delayed initial public offer (IPO).
PSA’s listing, though shelved for now, is expected to net proceeds of about $3.75 billion.
Based on a price-earnings ratio of about 10 times, gross proceeds from a public float of SingPost could be about $550 million, according to Ms Brenda Lee, a telecom analyst at Daiwa Institute of Research.
In a report yesterday, The Business Times had said that investment bankers would be presenting various strategic options to SingTel on its divestment of SingPost and the subsequent listing of the unit.
The report named several investment banks, such as Goldman Sachs, Salomon Smith Barney, Merrill Lynch, UBS Warburg and Credit Suisse First Boston. Local banks were also reported to be involved in the exercise.
However, when contacted yesterday, most investment banks declined to comment.
‘Generally, most of the top investment bankers are talking to SingTel and presenting all kinds of ideas,’ said one.
Analysts said a SingPost listing would raise the profile of the postal unit and enable its management to be more accountable for the unit’s operations.
SingPost could go the way of other government-linked post office firms such as Germany’s Deutsche Post and Holland’s TPG which were listed recently.
The two have also started venture capital funds in related industries.
On the flip side, some critics said a listing by SingPost would not have much impact on SingTel, given the size of the former in terms of revenues and potential market capitalisation.
For the year ended March 2001, SingPost’s revenues stood at $371.2 million, or about 7.5 per cent of SingTel’s revenues.
‘Assuming they float 50 per cent of SingPost, the earnings dilution on SingTel would be 3 per cent. So it’s not substantial,’ Daiwa’s Ms Lee said.
