Southeast Asia's largest telco SingTel will sell its entire 30 percent stake in its loss-making Pakistan associate Warid Telecom to a unit of the Abu Dhabi Group, Warid Telecom Pakistan, which owns the rest of the 70 percent.
As part of the deal, SingTel will receive US$150 million in cash and a 7.5 percent share of the net proceeds from any future sale, public offering, or merger of Warid, according to its filing on Tuesday with the Singapore Exchange.
In the statement, SingTel said that the sale was a result of a strategic review of the investment, its competitive position, and opportunity. SingTel added that it would take an estimated loss of about S$230 million (US$186 million) on the transaction.
The telco had been looking to sell its shares in the loss-making associate, and had stopped accounting for its stake since classifying it as an "asset held for sale" since July 1 2012.
"The unaudited net tangible asset value of Warid was approximately 2.9 billion Pakistan rupees (US$29.6 million) as at September 30, 2012," said SingTel.
In 2007, SingTel had bought its stake in Warid Telecom for US$758 million and had described the acquisition as a "natural fit" following its investments in South Asia, such as India and Bangladesh.
The Singapore-based company currently owns significant stakes in five other foreign telcos: India's Bharti Airtel, Pacific Bangladesh Telecom, Indonesia's Telkomsel, Thailand's Advanced Info Service, and Globe Telecom in the Philippines.