IPO could raise cash for overseas carrier investors and provide health check of market

August 24, 2004

2 Min Read
Carriers to Cash In on StarHub

Singaporean operator StarHub is planning an IPO on its home exchange that could raise hundreds of millions of dollars for BT Group plc (NYSE: BTY; London: BTA) and NTT Group (NYSE: NTT) and pave the way for other telecom IPOs.

The operator, which provides fixed, mobile, and pay TV services, filed its prospectus with the Monetary Authority of Singapore on Monday and is aiming to raise up to S$750 million (US$438 million) by floating between 25 percent and 30 percent of its stock, according to sources cited by Reuters.

State-owned Singapore Technologies Telemedia Pte. Ltd. (STT) is expected to hang on to its 49.8 percent stake, while BT and NTT could offload their respective 11.7 percent and 14.3 percent stakes. Depending on the price, BT, which has been offloading non-core assets for the past few years, could raise up to US$180 million and NTT up to US$240 million.

StarHub, which competes with incumbent SingaporeTelecommunications Ltd. (SingTel) (OTC: SGTJY) and mobile operator MobileOne Ltd. (M1) (Singapore: MONE) -- which listed its shares in late 2002 (see M1 Bucks IPO Trend) -- recorded a net loss of S$45.5 million (US$26.6 million) from revenues of S$654.5 million (US$382 million) in the first half of 2004.

If the IPO is successful it could pave the way for other telecom listings in the Asia/Pacific region, including an anticipated IPO by China Netcom Corp. Ltd.; that of growing Chinese equipment vendor ZTE Corp. (see ZTE HK IPO OK'd); and the separate listing of some of Hutchison Whampoa Ltd.'s (Hong Kong: 0013) telecom assets. It's also possible that a buoyant investment market could even tempt Huawei Technologies Co. Ltd. out of its shell (see Is Huawei Edging Closer to IPO?).

— Ray Le Maistre, International News Editor, Light Reading

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