The Singtel Group has sold 2.8% of its stake in Gulf Development, Thailand's largest energy company, for approximately $1 billion as it continues its asset recycling programme to drive growth and sustainable shareholder returns.
The transaction was executed via a private placement to institutional investors and will result in cumulative gains of approximately $140 million in equity.
Last year, Singtel received a 7.7% stake in Gulf Development following the completion of the amalgamation of Intouch Holdings and its largest shareholder Gulf, to simplify Singtel’s shareholding in its Thai associate AIS. The merger removed Intouch as the intermediary holding company and resulted in the creation of a new entity, Gulf Development.
“The placement generated strong interest and was multiple times oversubscribed," says Arthur Lang, Singtel's group CFO. "We saw strong support from both international and domestic institutional investors."
This divestment underscores Singtel's concerted efforts to optimise its portfolio as Singtel continues its "disciplined approach" to capital management.
Lang notes that Gulf Development’s share price has performed strongly since listing, providing an attractive opportunity for Singtel to crystallise value and reallocate capital towards growth and driving shareholder returns.
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"Thailand remains a key market for Singtel and we continue to have a strong partnership with Gulf Development through our joint investment in AIS and our data centre venture GSA," says Lang.
After the transaction, Singtel will hold a 4.95% stake in Gulf Development, valued at some $1.8 billion. The Gulf transaction is the latest in the telco's capital recycling programme which has now unlocked $6.8 billion since the start of the Singtel28 plan in 2024, bringing Singtel some three-quarters of the way toward achieving its $9 billion mid-term target.
“Today’s transaction is just one of many levers in our capital management arsenal to consistently return capital to our shareholders and to fund the development of our growth engines," says Lang.
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"With this transaction, we have raised a total of $6.8 billion and have moved even closer to our $9 billion mid-term recycling target. This gives us considerable ability to fund and sustain our value realisation dividend, value realisation share buyback as well as digital infrastructure investments, putting us on track to deliver sustainable yield and growth over the coming years,” he adds.
As of June 22, Singtel has deployed approximately 34% of its planned $2 billion value realisation share buyback (VRSB), having bought and cancelled 148.8 million ordinary shares for an aggregate gross consideration of approximately $681 million.
Upon full execution of the $2 billion buyback, on a pro-forma basis, using FY2026 underlying net profit, this would lead to a permanent 3% accretion in underlying earnings per share and puts Singtel on a higher EPS and DPS trajectory.
Lang says that while Singtel's holding company discount has narrowed significantly since the implementation of Singtel28, the company is of the view that the current market valuation does not fully reflect Singtel's long-term value, given the strength of its core businesses, digital infrastructure and services assets and its regional associates.
"Our share buyback programme is a value-accretive use of capital, to enhance the value of our shares and signal its upside potential," he adds.
The buyback programme complements Singtel’s two-tier dividend policy comprising of a core dividend and a value realisation dividend (VRD). The core dividend is structured to deliver between 70% and 90% of underlying net profit to shareholders while the VRD is based on a programmatic framework which pays a reliable 3 to 6 cents per share annually on top of that.
In FY2026, Singtel proposed a VRD of 5.1 cents on top of a core dividend of 13.4 cents representing a payout ratio of 80% of underlying net profit. This would result in the highest annual ordinary dividend of 18.5 cents which also marks five consecutive years of dividend growth.
Singtel shares traded at $4.35 as at 2.31 pm, down 0.23%.
