SingTel ups direct stake in AIS by 2%

7 Nov 2011

Singapore Telecom (SingTel) has agreed to increase its direct stake in Thailand’s leading cellco Advanced Info Service (AIS) from 21.27% to 23.32% at a cost of up to THB7.9 billion (USD255 million). Singapore-controlled, Thai-based conglomerate Shin Corp has agreed to sell 61 million shares on the Thai stock exchange representing a 2.05% stake in AIS. The move to grab an additional 2.05% of AIS is aimed at maximising value from SingTel’s existing stakes in affiliated telecoms operators in countries including Thailand, India (Bharti Airtel), Indonesia (Telkomsel) and Pakistan (Warid Telecom). If approved by regulatory authorities and stakeholders, the shares will be acquired through a subsidiary, SingTel Strategic Investments, at a price set at THB7.3 billion-THB7.9 billion.

TeleGeography’s GlobalComms Database notes that Singapore has a much larger controlling interest in AIS than SingTel’s direct stake would suggest. AIS is currently owned by Shin Corp (42.6%) and SingTel (just under 21.3%), with 36.1% in free float, but Singapore’s government investment arm Temasek Holdings has a 42% stake in Shin Corp via Thai-registered Aspen Holdings, and also owns 55% of SingTel. Temasek’s other shares in Shin Corp are held through a nominee structure to keep direct foreign shareholdings under the 49% legal limit; when the Singaporean investor took over the Thai group it took indirect control of around 54% of Shin’s largest stakeholder Cedar Holdings, but unloaded some stock to Thai funds to meet stock exchange regulations dictating that listed companies must maintain a free float of at least 15%. AIS effectively fell into foreign hands in January 2006 when the family of Thaksin Shinawatra sold its 49.59% stake in Shin Corp to Temasek in a tax-free deal worth THB73.3 billion, and Temasek went on to gain over 96% of Shin through a mandatory share offer. The deal stoked up fierce public resentment towards the then-prime minster for offloading Thai assets to an overseas government. In the run-up to Thailand’s military coup in September 2006, political action groups urged the boycotting of AIS, causing a slowdown in its customer take-up rate lasting a number of months.

Thailand, Advanced Info Service (AIS), InTouch (formerly Shin Corporation), Singtel Group