SINGAPORE, March 18 Singapore Telecommunications
Ltd said it has hired Credit Suisse and
Morgan Stanley to conduct a strategic review of its
Australian unit Optus Satellite, a business that could be worth
at least $1.6 billion.
The strategic review, according to bankers and analysts,
could mean an outright sale or an initial public offering of a
unit that sells TV, telephony and broadband services to more
than 2 million subscribers, and had revenue of A$319 million
($332 million) for the financial year that ended March 31, 2012.
Sachin Gupta, an analyst at Nomura Securities, said the
asset could be worth between A$1.5 billion and A$2 billion
($1.6-$2.1 billion) as the margin for the satellite business
could be about 80 percent.
"This is not the first time SingTel has reviewed this we
understand - given their extensive portfolio, they constantly
review their assets and networks ... looking for ways to
monetise," Gupta said. "If the market or the buyer is willing to
pay seven times or eight times EBITDA multiple, for these
assets, then why not."
Optus operates a fleet of five satellites, with another
satellite, Optus 10, scheduled for launch in 2013, according to
the statement from SingTel.
SingTel, which owns Australia's Optus and stakes in several
mobile operators in the region, has been struggling to increase
its earnings because of slowing growth in Singaporean and
Australian mobile phone subscriptions and problems at Indian
associate Bharti Airtel.
Australia accounted for 65 percent of SingTel's revenue in
the financial year 2012.