Singtel pumps $1.8 billion into Thai, Indian partners in emerging mkts bet

By Aradhana Aravindan and Anshuman Daga

SINGAPORE (Reuters) - Singapore Telecommunications is investing S$2.47 billion ($1.8 billion) for bigger slices of the top mobile operators of Thailand and India, as Southeast Asia's largest telecoms firm raises its bet on emerging markets to spur growth.

Singtel said on Thursday it is buying 21 percent of Thai telecoms firm Intouch Holdings PCL for S$1.59 billion and 7.39 percent of India's Bharti Telecom for S$884 million. The stakes are being bought from Singapore state investor Temasek, which owns more than half of Singtel.

Intouch is the largest shareholder in Advanced Info Services PCL (AIS), Thailand's biggest mobile operator, in which Singtel already holds 23.3 percent. Bharti Telecom is the holding company of Bharti Airtel, India's largest telecoms firm and Singtel's existing partner.

The stake purchases will increase Singtel's exposure to the high growth telecom sectors in Thailand and India that are being driven by rising mobile data usage. India is the world's second-biggest mobile phone market by customers, after China.

"Strategically, they are positioning to be a natural buyer of any other stakes that could potentially come into play," said Daiwa analyst Ramakrishna Maruvada.

Singtel, Singapore's most valuable company on the stock market, has assembled over more than a decade a portfolio of stakes in regional mobile associates outside its small home market, as a result of which overseas businesses now contribute 75 percent to its revenues and core earnings.

The company also operates in Australia through subsidiary Optus. In an attempt to speed up growth, Singtel has been broadening its sphere of operations, spending more than a $1 billion since 2012, mainly to build its cybersecurity and digital businesses.

'PACKAGE DEAL'

The new deals will help boost its growth pace. Singtel's economic interest in AIS will rise to 31.8 percent and in Bharti Airtel to 36.2 percent.

The deals will be funded by issue of 386 million Singtel shares to Temasek totalling S$1.605 billion, and cash and short-term debt.

Singtel said the acquisitions and share placement are interdependent. Temasek's stake in Singtel will rise to 52.27 percent from 51.1 percent prior to the share issue.

"This is a package deal that we have negotiated with Temasek that gives us the additional exposure to India and Thailand, financed in a way that allows us to maximise our capital structure," Singtel group CEO Chua Sock Koong told reporters.

The Thai stake has stoked controversy for Temasek. In 2006, a Temasek-led $3.8 billion investment in Shin Corp, then owned by the family of former Thai Prime Minister Thaksin Shinawatra, triggered a prolonged political crisis in Bangkok that led to Thaksin's ouster in a bloodless coup. Shin Corp later became Intouch Holdings.

Singtel said it will appoint an independent financial adviser on the deals. They require shareholder and regulatory approvals, and are expected to be completed by December, 2016, it said.

Singtel shares rose 1 percent in a flat market, while both AIS and Intouch were up 1.2 percent.

($1 = 1.3410 Singapore dollars)

(Reporting by Anshuman Daga and Aradhana Aravindan; Editing by Stephen Coates and Muralikumar Anantharaman)