Monday, August 30, 2021

Singtel - Caught between a rock and a hard place

Singtel looks to be caught between a rock and a hard place. One of its associates Bharti Airtel intends to raise up to Rs 21,000 crore through a rights issue to bolster its balance sheet [news].

A Bloomberg Intelligence analyst estimates Singtel may need to cough up S$1.2 billion to avoid dilution of its 31.7% stake in Bharti.

As we know, Singtel is in the midst of rolling out its own 5G infrastructure in Singapore, and it costs a bomb. We also know Singtel's subsidiary Optus is trying to offload its towers to raise capital. But I fear this may not be sufficient, which implies Singtel may have to risk cutting its dividend to conserve cash.

It certainly doesn't bode well to equity investors like me. We shall see in due time what Singtel management has to say about this matter.

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Tuesday, August 10, 2021

And CLI is thus born...

No surprise here, since the market has anticipated investors to vote in favour of transiting CapitaLand to CapitaLand Investment (CLI).  So far, the market has been receptive of the transition, as inferred from the rise in CapitaLand's stock price post-announcement.

CapitaLand management and board released a Q&A document this morning [announcement]. To me, the most interesting question in the list was why did CapitaLand management choose to distribute in specie CapitaLand Integrated Commercial Trust (CIC) units to CapitaLand shareholders instead of other REITs (AREIT, ART etc)?

Have a read of the document if you are keen to find out the answer.

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