SingTel – BT

SingTel: No rights issue on the horizon

CEO says telco wants to maintain ‘a healthy debt-to- equity ratio’

ALTHOUGH rules for rights issues have been eased, Singapore Telecom’s local chief says the company will not be turning to shareholders any time soon to help expand its war chest.

‘Calling capital from shareholders is a last resort. While the credit markets are available, we will continue to get money from credit markets,’ said SingTel Singapore CEO Allen Lew.

SingTel has an A+ rating from Standard and Poor’s and an Aa2 rating – the third-highest on a scale of 10 – from Moody’s Investors Service.

With these strong ratings, loans may be SingTel’s preferred method for recapitalisation. But other local companies are increasingly tapping on shareholders for funding amid the tight credit market.

Last month, DBS Holdings unveiled a rights issue to raise $4 billion. And companies such as Saizen Reit, United Engineers and KSH Holdings have since taken the same route.

Earlier this week, the Singapore Exchange even rolled out new measures to cut the time needed for companies to complete rights issues.

But SingTel’s Mr Lew said: ‘We always want to retain a certain level of debt.’ SingTel wants to maintain ‘a healthy debt-to-equity ratio’, he told BT on the sidelines of the launch of SingTel’s new retail outlet at Jurong Point.

With the opening, the operator will say goodbye to the ‘Hello’ branding that has previously been associated with its retail presence.

Like the new outlet, the company’s 10 other Hello stores will take on the new ‘SingTel Shop’ name as they are refurbished over the next few years. The shops will also get a similar interior make-over to reflect SingTel’s new multimedia positioning, Mr Lew said.

For example, there are large touch-screen displays inside and outside the Jurong Point shop so customers can search for product information and even buy ringtones or music tracks after operating hours.

Traditional customer service counters have been replaced with a cafe-style set-up, where customers are waited on at individual tables by service staff.

‘This (revamp) will help us enhance the brand and help us cut through the clutter during this period,’ Mr Lew said.

SingTel would not say how much the retail overhaul is costing. ‘Our own generated cash flow can fund this,’ said Mr Lew. SingTel had $1.089 billion cash and cash equivalents as at Sept 30 last year.

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