But long-term gains are expected.
According to OCBC Investment Research, SingTel announced that it has entered into a deal to sell its entire 30% stake in Warid Telecom to Warid Telecom Pakistan LLC (WTPL), subject to certain conditions being met. SingTel notes that the estimated loss on disposal will be approximately S$230m, including foreign currency translation losses and transaction costs.
SingTel will receive an aggregate consideration of US$150m and the right to receive a 7.5% share of net proceeds from any future sale, public offering or merger of Warid.
We expect the loss (likely booked in 4QFY13) to have a near-term impact but in the longer run, we see it positively. We currently have a BUY on SingTel and will review our S$3.53 fair value after its 3QFY13 results due 14 Feb.
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