Keppel to sell M1 telco business to rival Simba Telecom for S$1.43 billion cash amid tough market
In an announcement on Monday (Aug 11), Keppel said payment will be in cash and it will receive close to S$1 billion for its 83.9 per cent effective stake in M1.
It said Simba Telecom had put forward the strongest bid, at an 'attractive valuation', among interested parties. Its combination with M1 is expected to create more revenue pools and career opportunities, considering how they have the least overlap in resources.
The parent company of Simba Telecom, Australian-listed Tuas Ltd, said in a statement on Monday it's seeking to raise A$416 million (S$348.4 million) in equity by way of a non-underwritten institutional placement and share purchase plan to fund the acquisition, in addition to existing cash. The funding will also be supported by S$1.1 billion of fully underwritten bank debt financing.
The floor price for the offer will be A$5.24 per share representing a 4.9 per cent discount to Tuas' closing price on Friday. The institutional placement will be about A$366 million based on the floor price.
Tuas, which has a current market value of almost A$2.6 billion, is also undertaking a share purchase plan (SPP) for eligible shareholders to raise around A$50 million. New shares under the SPP will be issued at the lower of placement price and 2 per cent discount to the five-day volume-weighted average price up to, and including, the closing date of the SPP.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Upon completion, Tuas expects its pro-forma debt to earnings before interest, taxes, depreciation and amortisation (Ebitda) leverage ratio to be about four times, and aims the finish the acquisition 'over the next few months', which is set to be 'highly earnings per share (EPS)-accretive for shareholders from year one'.
Tuas is one of the companies in the TPG Telecom Group, and was incorporated in March 2020. The company noted it is on track to meet outlook expectations laid out in its H1 FY2025 guidance, and will announce its full-year FY2025 results on Sep 24.
The sale is said to represent an implied valuation of 7.3 times EV/Ebitda. The company is expected to receive cumulative cash of over S$700 million with the proposed divestment, coming after an estimated accounting loss of S$222 million excluding transaction costs (assuming the transaction occurred on Jun 30).
The actual loss on divestment to Keppel upon completion, however, will depend on the consideration, which is subject to post-completion adjustments and the carrying value of the assets relating to the proposed sale. This includes goodwill from the acquisition of M1 by Keppel in 2019, to be attributed to the assets of the divestment, at the date of completion.
Keppel first invested in M1 in 1994 as one of its founding members, and continues to retain M1's information and communication technology business and certain assets excluded from the proposed transaction.
Loh Chin Hua, chief executive of Keppel, said the divestment is over and above the S$14.4 billion non-core portfolio that has been identified for monetisation, with about S$1 billion cash from the sale to go to growth opportunities.
'This will not only improve the New Keppel's return on equity, but also support the market's further re-rating of Keppel,' he added. New Keppel refers to the group's transformation into a global asset manager and operator, which began in 2024, as the company moves towards aligning with more new energy infrastructure and digital connectivity solutions.
This sentiment had been clear since late July 2025, given how the telco market is under 'severe competitive pressure' with four operators and around seven mobile virtual network operators, said Manjot Singh Mann, chief executive of Keppel's connectivity segment.
For H1 FY2025, the group's revenue in this segment , which includes data centres and telco M1, rose 13.9 per cent to S$742.4 million. The segment's net profit, however, declined 16.9 per cent to S$57.5 million, on the back of lower overall earnings from M1, in addition to valuation gains on sponsor stakes in private funds.
Mann previously highlighted the wave of SIM-only plans replacing contract plans, a trend that has diluted average revenue per user amid an 'overcrowded market'.
Keppel for the same half-year period reported a 24.2 per cent year-on-year increase in net profit to S$377.7 million, translating to an EPS of S$0.208, up 23.1 per cent from S$0.169 a year prior.
Shares of Keppel closed Friday 0.8 per cent or S$0.07 down at S$8.58. The company called for a trading halt on Monday morning.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
an hour ago
- Straits Times
Sailing–Australia lead Germany SailGP, NZ stay ahead overall
Sign up now: Get ST's newsletters delivered to your inbox Australia's Bonds Flying Roos ended the opening day of the inaugural Germany Sail Grand Prix with an eight-point lead over New Zealand thanks to an impressive late charge on Saturday. Australia shrugged off a start-line penalty in the second race of the day, as Tom Slingsby's crew clawed back to finish third before out-duelling Spain to win race three and coming second to New Zealand in the day's fourth and last race. Australia's tally of 32 points put them ahead of Peter Burling's New Zealand, who won race four. The Kiwis ended the day on 24 points, protecting their overall lead in the championship standings. Quentin Delapierre's France finished third, level with New Zealand on 24 points, after being cleared to compete following overnight repairs to a damaged starboard rudder. Rockwool Racing Denmark broke SailGP's racing and overall F50 speed record during the third race, as they nailed the start and accelerated to a massive 103.93 km/h. Germany (Deutsche Bank) won the opening race to the delight of the Sassnitz crowd, a bright start for the team who began the weekend 11th overall on zero points. Britain's Emirates GBR won race two and finished sixth on 19 points. Their hopes of a strong opening day were dashed after a collision with United States in the fourth race which left their F50 with a hole and tore away the U.S. boat's port bow. Top stories Swipe. Select. Stay informed. Singapore Over 280 vapes seized, more than 640 people checked by police, HSA in anti-vape raids at nightspots Singapore SPLRT disruption: 28km of cables to be tested during off-service hours; works to end by Aug 23 Singapore First-half GDP boost likely temporary; Republic must stay relevant amid challenges: Chan Chun Sing Life Six-figure sales each durian season: Why S'pore durian sellers are now live selling on TikTok Singapore Airport-bound public bus to be fitted with luggage rack in 3-month trial: LTA Asia Australian universities slash staff, courses as rising wages and foreign student curbs bite Life Meet the tutors who take O-level exams every year to create a 'war mate' bond with their students Life Pivot or perish: How Singapore restaurants are giving diners what they want No one was injured in the incident and the American team will be docked 12 event points. Following their victory in Portsmouth, England last month, New Zealand will bid for a second successive SailGP win on Sunday. REUTERS
Straits Times
3 hours ago
- Straits Times
Grand Slam Track won't take place in 2026 till athletes paid for 2025
Sign up now: Get ST's newsletters delivered to your inbox Grand Slam Track is struggling to compensate its athletes after pulling its final meet of 2025 in Los Angeles, said its founder Michael Johnson. – The financially troubled Grand Slam Track circuit will not take place in 2026 until athletes awaiting prize money for 2025 are paid, its founder Michael Johnson said on Aug 15. He admitted in a statement 'we are struggling with our ability to compensate' athletes from the three meets that took place in 2025 in Kingston, Jamaica and in Miami and Philadelphia. The four-time Olympic sprint gold medallist said he had taken the decision to cancel the fourth and final meeting in Los Angeles 'to avoid further losses and start the lengthy process of stabilising the company to get back on track'. 'But unfortunately, we saw circumstances change in ways beyond our control,' he said. The 57-year-old added: 'The 2026 season will not happen until those obligations are met – and that is my No. 1 priority.' Johnson said he had held talks with new investors, and he remained 'confident' about the future of Grand Slam. 'We're not done yet. Not even close,' he said. Top stories Swipe. Select. Stay informed. Singapore Over 280 vapes seized, more than 640 people checked by police, HSA in anti-vape raids at nightspots Singapore SPLRT disruption: 28km of cables to be tested during off-service hours; works to end by Aug 23 Singapore First-half GDP boost likely temporary; Republic must stay relevant amid challenges: Chan Chun Sing Life Six-figure sales each durian season: Why S'pore durian sellers are now live selling on TikTok Singapore Airport-bound public bus to be fitted with luggage rack in 3-month trial: LTA Asia Australian universities slash staff, courses as rising wages and foreign student curbs bite Life Meet the tutors who take O-level exams every year to create a 'war mate' bond with their students Life Pivot or perish: How Singapore restaurants are giving diners what they want Johnson launched Grand Slam as an alternative to the Diamond League series of international meets with an important difference – it would only feature track events and no field events. He promised a more concentrated format with more head-to-head races between the world's best athletes. However, while the series was able to recruit stars such as US Olympic 200m champion Gabby Thomas and 400m hurdles world record holder and double Olympic gold medallist Sydney McLaughlin-Levrone, it failed to attract a host of top sprinting talent, including the reigning men and women's 100m champions Noah Lyles and Julien Alfred. The series offered athletes prize money of up to US$100,000 (S$128,000) for their overall standings after participating in two races at each meet. Athletes were pictured holding up giant cheques showing how much money they had won. However, while the competitors expressed enthusiasm for the series, there were clear signs it had failed to capture the imagination of fans. There were swathes of empty seats at the opening meet in Kingston, while for the third meeting in Philadelphia, the programme was cut from three days to two. In July, Front Office Sports reported that Grand Slam Track owed around US$13 million to athletes who had participated. 'It is incredibly difficult to live with the reality that you've built something bigger than yourself, while simultaneously feeling like you've let down the very people you set out to help,' Johnson said in a statement. 'We promised that athletes would be fairly and quickly compensated. Yet, here we are struggling with our ability to compensate them.' Off the track, Ukraine's Olympic and world champion Yaroslava Mahuchikh notched her 22nd Diamond League victory in a high jump shoot-out with Australian Nicola Olyslagers in Katowice on Aug 15. The women's high jump was one of three disciplines along with the women's shot put and pole vault that were held in the main square of the south-western Polish city. The main Silesia Diamond League meet will be held in neighbouring Chorzow on Aug 16. The high jump predictably turned into a battle between the two clear favourites. Mahuchikh cleared 2.00 metres at her second attempt, piling pressure on her Australian rival Olyslagers, a two-time defending indoor champion and silver medallist at the last two Olympics. But the challenge proved too much, and Olyslagers had to settle for second with 1.97m, behind the world record holder who has now claimed three circuit wins this season. Germany's Imke Onnen was a distant third with a best of 1.91m. AFP, REUTERS
Straits Times
10 hours ago
- Straits Times
Universities in Australia slash staff and courses as foreign student curbs hit
Sign up now: Get ST's newsletters delivered to your inbox The cap on the intake of international students hurts the profitability of Australian universities. – Australian universities have slashed entire courses and let go of staff – particularly in the humanities – to stay afloat as they grapple with rising wages as well as a cap on the intake of international students, which hurts profitability. One of Australia's leading universities, the Australian National University, has cut more than 200 positions through redundancies and voluntary departures as it seeks to find savings of A$250 million (S$208.66 million) by 2026.
