Singapore’s SingTel, which owns just under a third of Bharti Airtel, said it will support the Indian operator in its effort to acquire Zain’s African networks, excluding Morocco and Sudan.
A senior SingTel executive told Reuters that the acquisition would be financed by debt (i.e. bond issuance), and there was no need to inject money directly into Bharti Airtel. The company’s CEO International, Lim Chuan Poh, said: “There’s no compulsive decision that we need to go and spend money to maintain our stake to avoid being diluted.”
The problem, however, is why would SingTel want to do that? If they are ready to support the idea, why don’t go and grab Zain Africa directly?
In that sense, Deutsche Bank’s analyst William Bratton said: “This is one of the few African portfolios potentially available, and it is not clear how SingTel’s shareholders benefit from indirect exposure to Africa. We are increasingly puzzled by SingTel’s international strategy.”
Finally, in case you wonder (and you probably don’t), SingTel is majority owned by the Singapore government’s investment arm – Temasek Holdings.