SINGTEL requested a trading halt on Wednesday (Mar 13) afternoon shortly after the Australian Financial Review (AFR) reported that the telecommunications giant was in advanced discussions to sell Optus to Canadian private equity firm Brookfield.

The Australian daily had claimed in an article published at 3.10 pm (Singapore time) that the deal was estimated to be worth some A$16 billion (S$14.1 billion).

According to its sources, negotiations between Singtel and Brookfield were “well advanced”. 

Shares of Singtel : Z74 0% rose as much as 4.2 per cent or S$0.10 to S$2.49 as at 3.34 pm amid heavy trading volumes, following the release of the report.

The counter later eased slightly to S$2.48, up S$0.09 or 3.8 per cent, before the group called for a trading halt at 3.35 pm. More than 71.4 million of its securities had changed hands at the time.

Less than an hour later at 4.21 pm, Singtel clarified that there was “no impending deal to offload Optus for the said sum” of A$16 billion, as reported by AFR.

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“Optus remains an integral and strategic part of the Singtel group and we are committed to Australia for the long term,” said Singtel.

“Our current focus has been on improving network resilience and conducting a CEO search (for Optus).”

The group added that it regularly conducts strategic reviews of its portfolio to “optimise the value of (its) assets and businesses, and will explore all options to maximise shareholder value”.

Following the release of this statement, the group requested to lift its trading halt with effect from 8.30 am on Thursday.

Singtel’s emphasis on its CEO search for Optus comes in the wake of Kelly Bayer Rosmarin’s resignation in November 2023, after the Australian telecommunications network was hit by a network-wide outage affecting about 10 million of its customers.

Chief financial officer Michael Venter was appointed to fill in for Bayer Rosmarin as interim CEO amid Optus’ global search for a replacement.

Singtel’s Mar 13 response echoes the group’s stance made on Jan 30, when the telecommunications provider denied exploring transactions involving the enterprise business of Optus.

On Jan 30, AFR reported that Optus executives had been considering divestments over the past two years to help Singtel take some money off the table – and that one option would be to divest Optus’ enterprise and business division.

Addressing the earlier article, Singtel similarly stated that it viewed its stake in Optus as “strategic”, while reiterating its belief in the long-term outlook of its Australian unit.

Singtel, which has been investing in Optus since 2001, last month reported a 12.5 per cent decline in third-quarter net profit to S$465 million.

This was attributed to a higher net exceptional loss that mainly came from Optus and Bharti Airtel, including a provision for costs related to the recent outage in Australia.

Based on Singtel’s Q3 financials released on Feb 23, Optus’ operating revenue for the quarter ended Dec 31, 2023 fell 5.4 per cent year on year to S$1.8 billion – while earnings before interest, taxes, depreciation and amortisation (Ebitda) declined 1.8 per cent on year to S$465 million.

On Mar 7, the group announced it had sold 49 million of its shares, or a 0.8 per cent direct stake, in its Indian associate Airtel to US-based investment firm GQG Partners.

Singtel estimated the deal to result in gross proceeds of about S$950 million, and a net gain of about S$700 million.