Singaporean telecoms incumbent SingTel has sold its 30% stake in Pakistan’s Warid Telecom to the Abu Dhabi Group, which already owned the other 70% of the loss-making operator.
SingTel will receive a cash payment of $150 million for its shares as well as 7.5% of the proceeds from any future sale of Warid (Abu Dhabi, United Arab Emirates).
It says the sale follows a strategic review of the investment, its competitive position and opportunity.
SingTel will take an overall loss of S$230 million ($186 million) on disposal of the asset, including foreign currency translation losses and transaction costs.
The company had classified Warid as an “asset held for sale” since 1 July 2012, when it stopped accounting for its stake.
For the quarter ending in June 2012, SingTel reported a pre-tax loss of S$18 million from Warid, compared with a loss of S$12 million during the same period in 2011.
Warid has faced higher interest payments on increased borrowings, with profits accruing to SingTel also affected by the depreciation of the Pakistani Rupee.
Customer numbers had also dropped by 6.2%, to 13.5 million, in the three months to 30 June 2012.
According to SingTel’s statement, the unaudited net tangible asset value of Warid was about S$36 million as of 30 September 2012.
SingTel paid $758 million for its 30% stake in Warid in 2007, when it was keen to build a position in south Asian markets.
Warid launched services in Pakistan in 2005 with a 15-year license to operate GSM services.
SingTel still has telecoms interests in Bangladesh, India, Indonesia, the Philippines and Thailand.