Singapore, 19 October 2006 -- Singapore Telecommunications Limited (Singtel) today announced that it has sold its entire 40 per cent stake in PT Bukaka Singtel International (BSI) for a cash consideration of Rp 532 billion or approximately S$92 million to PT Bukaka Telekomindo International (BTI).
Prior to this transaction, BTI held a 51 per cent stake in BSI. The consideration was arrived at based on a combination of the discounted cash flow methodology and comparable benchmarks for similar transactions.
BSI currently provides fixed line telecommunications in the eastern part of Indonesia under a Kerja Sama Operasi Agreement (KSO Agreement) with PT (Persero) Telekomunikasi Indonesia, Tbk (PT Telkom). The KSO Agreement terminates on 31 December 2010, at which time BSI’s rights, title and interest in the telecommunication facilities constructed by it would be transferred to PT Telkom, subject to the terms and conditions of the KSO Agreement.
Singtel invested in a 40 per cent stake in BSI for S$47 million in 1995. The current unaudited consolidated carrying value of BSI was approximately S$98 million, including the release of foreign exchange translation losses previously taken to reserves. With net proceeds from the divestment of about S$87 million, Singtel will record an exceptional loss on disposal of about S$11 million.
Singtel continues its strong partnership with PT Telkom and remains committed to its investment in PT Telkom’s cellular business Telkomsel, Indonesia’s leading mobile operator.