Abu Dhabi, UAE - June 28, 2007 – Singapore Telecommunications Limited (“Singtel”) and Warid Telecom (Private) Limited (“Warid Telecom”), today announced that they have entered into a definitive agreement subsequent to which Singtel will acquire a 30 per cent equity stake in Warid Telecom for an estimatedUS$758 million.
In just two years from its commercial launch in 2005, Warid Telecom has reached nearly 9.7 million in reported subscriber numbers, representing an estimated market share of 16.6%, and making it the third largest mobile operator in Pakistan, as of April 2007. With a large population in excess of 160 million growing at over 2 per cent per annum, and a young median age of 20 years, Pakistan represents the sixth largest population base in the world. Fuelled by foreign direct investment, its economy has seen strong growth over the past few years. With a current low mobile penetration rate of 36 per cent, and a strong regulatory regime, the Pakistani cellular market is one of the most attractive in the world and has recently attracted sustained interest from international telecom operators. Singtel will invest US$758 million (subject to closing adjustments on completion of the transaction) to acquire a 30 per cent stake in Warid Telecom, valuing the company at an enterprise value of US$2.9 billion. The investment is being made as part of a strategy to support Warid Telecom’s continued growth and enhance its market position. The purchase will be satisfied through Singtel’s internal and/or external sources of funds. Warid Telecom is part of the Abu Dhabi Group, led by HH Sheikh Nahayan Mabarak Al Nahayan, a senior member of the Emirate of Abu Dhabi’s ruling family.
Commenting on the announcement, HH Sheikh Nahayan, said: “Our partnership with Singtel marks a new milestone in the development of our company. Our customers, employees and shareholders stand to reap the benefits of this partnership as we work together to execute our long-term growth strategy. We look forward to the opportunities that this partnership will bring to Warid Telecom and to the broader telecom sector in Pakistan.”
This latest investment in Warid Telecom will further strengthen Singtel’s position as the leading force in the Asia Pacific mobile market. Including Warid Telecom, Singtel, together with its associated companies, will have a major presence in eight regional cellular markets with a total of more than 130 million subscribers.
Singtel’s Group Chief Executive Officer, Ms. Chua Sock Koong, said: “Singtel has made substantial investments in markets with high growth potential in South Asia, such as India and Bangladesh. Warid Telecom in Pakistan is a natural fit. It is also an attractive business with strong brand recognition. The management of Warid Telecom has established an impressive operational track record, turning EBITDA-positive in only 17 months after its commercial launch. We see strong upside in terms of the company’s performance and look forward to its continued contribution towards the development of mobile communications in Pakistan.” Mr. Bashir Tahir, Chief Executive Officer of Warid Telecom International added: “Singtel has a reputation for making telecom investments where they can add value strategically, and where they work with management to help grow businesses. With Singtel’s technological and commercial expertise, Warid Telecom will be well positioned to take on the challenges of the next phase of its development. We see Singtel sharing with us its international experience and knowledge in different aspects of operating a telecommunications business. Through this partnership, we hope to achieve synergies in the areas of procurement, marketing, international roaming, network planning and product development which will ultimately benefit our customers.” Goldman Sachs advised Warid Telecom and HSBC advised Singtel. Cleary Gottlieb Steen & Hamilton and Allen & Gledhill acted as legal advisers to Warid Telecom and Singtel respectively. Completion of the purchase is conditional upon the fulfillment of certain conditions precedent.
About Warid Telecom (Private) Limited (“Warid Telecom”)
Warid Telecom is the third largest mobile operator in Pakistan, with a market share of 16.6%, and has nearly 9.7 million in reported subscriber numbers as of April 2007. The company launched its services in May 2005 and has sustained a very rapid expansion since. The company has a 15-year license to operate GSM-based mobile services in Pakistan, Azad Jammu and Kashmir, and the Northern areas.
Warid Telecom has achieved its current market position in Pakistan through a focus on customer service and innovation, and is recognized for its quality of service and strong brand image. The company has over the last six months more than doubled its investment in the expansion of its network and capacity in order to meet the rapidly growing demand for its services.
About Warid Telecom International LLC (“WTI”) and Abu Dhabi Group
Warid Telecom is part of WTI, a telecommunications group set up in 2004 to acquire, own and operate telecom assets in the emerging markets of Asia and Africa. In addition to its operation in Pakistan, WTI successfully launched its operation in Bangladesh in May 2007 with half a million subscribers acquired in less than two months. Furthering its international expansion in its target markets, WTI has acquired licenses in Congo Brazzaville and Uganda and is preparing to launch its operations in these two markets in the second half of 2007. Through its subsidiary Wateen Telecom, the Group also operates a 5,000 km fiber optic backbone in Pakistan and is launching a Wimax service in addition to the Long Distance and International (LDI) service it offers today.
WTI is backed by the Abu Dhabi Group, one of the leading business groups in the United Arab Emirates, with interests in sectors including banking and financial services, hospitality, construction, telecommunications services, real estate and manufacturing. Led by His Highness Sheikh Nahayan Mabarak Al Nahayan, the Abu Dhabi Group has been investing in Pakistan for many years and is today one of the largest foreign investors in the country. Apart from Warid Telecom in Pakistan, its other successful investments in the country include Bank Alfalah Limited‚ United Bank Limited, Taavun (Pvt.) Limited, Alfalah Insurance Company Limited, Alfalah GHP Investment Management, Alfalah Securities (Pvt) Ltd and Wateen Telecom (Pvt) Limited.
About Singapore Telecommunications Limited (“Singtel”)
Singtel is Asia's leading communications group with operations and investments around the world. Serving both the corporate and consumer markets, it is committed to bringing the best of global communications to customers in the Asia Pacific and beyond. With significant operations in Singapore and Australia (through wholly-owned subsidiary Singtel Optus), the Group provides a comprehensive portfolio of services that include voice and data services over fixed, wireless and Internet platforms.
To serve the needs of multi-national corporations, Singtel has a network of 37 offices in 19 countries and territories throughout Asia Pacific, Europe and the United States. These offices enable Singtel to deliver reliable and quality network solutions to its customers, either on its own or jointly with local partners.
The Group also has major investments in Bangladesh, India, Indonesia, the Philippines and Thailand. Including Warid Telecom, Singtel, together with its associated companies, will have a major presence in eight regional cellular markets with a total of more than 130 million customers. Singtel employs more than 19,000 people worldwide and had a turnover of S$13.15 billion (US$8.40 billion) and net profit after tax of S$3.78 billion (US$2.42 billion) for the year ended 31 March 2007.