Singtel will no longer be publicly listed in Australia from the end of May, if its request to be delisted from the Australian Securities Exchange (ASX) is approved.
The Singapore-based parent company of Australia's second-largest telco Optus is dual listed on the ASX and the Singapore Exchange Securities Trading Limited (SGX), and has a market cap of AU$67.1 billion.
On Tuesday morning, the company told local shareholders it had requested approval to delist from the ASX, with trading of its listed securities -- in the form of CHESS Depository Interests (CDIs) -- expected to be suspended by May 29, if it is approved.
Singtel said that the move to delist in Australia was prompted by a significant decline in recent years in the number of Singtel CDIs on issue locally. According to the company, as of March 31, ASX-issued CDIs represented 137 million of 15.94 billion shares issued by Singtel -- just 0.86 percent of its issued capital.
During the 12 months to March 31, the number of Singtel CDIs traded on the ASX accounted for only 6 percent of all Singtel shares traded.
"This reflects institutional investors' preference to hold and trade Singtel shares on its home exchange, the SGX," the company said in a statement (PDF). "With little demand to drive liquidity in its CDIs, Singtel's weighting in the S&P/ASX200 index has been reduced to approximately 0.03 percent. There is increased likelihood that Singtel's index weighting will be further reduced over time.
"After careful consideration, the Singtel board has determined that there are minimal shareholder benefits from maintaining Singtel's listing on the ASX. The delisting will also have the effect of reducing the costs arising from dual-listing requirements," the company said.
Singtel has stressed that delisting from the ASX will not affect its operations in Australia under the Optus brand, with no change in the company's strategy as it continues to grow and invest in its Australian business. The company claims to have already invested in excess of AU$13 billion.
Singtel Group chief corporate officer Jeann Low said the company remains committed to its Australian business, with Optus playing a very large part of the Singtel Group business.
Singtel shares will continue to be listed on the SGX, and trading on the SGX will continue during and after the delisting process, the company said.
Holders of local CDI securities in the company will be able to convert their Singtel CDIs into Singtel shares listed on the SGX on a one-for-one basis, sell their interests in Singtel shares on the SGX through Singtel-arranged sale facilities, or to sell their securities on the ASX prior to the proposed date of suspension and delisting.
The company said that the ASX has already confirmed that it is likely to agree to the removal of Singtel CDIs from the official listing on the ASX, subject to certain conditions being met.
Singtel has been listed on the ASX since its acquisition in 2001 of Cable and Wireless Optus, which was known as Optus Communications prior to the privatisation of its publicly owned predecessor Aussat.
During a media conference on Tuesday, Low said that Singtel's dual listing was a necessary move under the circumstances of the company's acquisition of Optus in 2001, but now no longer made sense.
"During 2001, the dual cross-listing requirement was seen as a reasonable overlay to the various undertakings that were put in place during the acquisition of Optus. It was in the context of government arrangements during that time," said Low.
Optus corporate and regulatory affairs vice president David Epstein said that the Deed of Agreement between the Commonwealth, Singtel, and Optus that was singed when the acquisition occurred had been altered to enable the delisting.
"Our deed with the Commonwealth remains in place. All we have simply done is entered into a counter-signed variation, with the Commonwealth removing the listing requirements. All other requirements remain in place," he said.
The announcement comes as Optus chief Allen Lew works to secure the company's future by offering entertainment services like Netflix on the back of a strong network core, along with competitive fixed-line and mobile bundles.
In February, Singtel revealed that its Optus subsidiary saw revenue grow by 6 percent for the third quarter, and added 100,000 mobile handset customers, despite seeing its total customer base decline by 12,000 during the period.