SingTel Shareholders to Vote in May on Veto Rights (Update1)
By Linus Chua
Singapore, April 27 (Bloomberg) -- Singapore Telecommunications Ltd. said its shareholders will vote at a meeting at the end of May on the government's decision to give up its right to veto major decisions.
The government, which owns 78 percent of the company, has officially informed the company of its plans to give up the so- called special golden share, SingTel said. The government announced its decision last month without saying when it would cede veto rights, at a time when SingTel made a bid for Cable & Wireless Optus Ltd., Australia's second biggest phone company.
Giving up the special veto right would help Southeast Asia's biggest phone company expand in the region to offset growing competition back home, as the government's stake has been a stumbling block in SingTel's bid to make acquisitions in markets such as Hong Kong and Malaysia. In its purchase of Cable & Wireless Optus, the Singapore government's holdings raised concerns among Australian government officials.
``It does make a difference in that it gives the perception that the government is giving up control of SingTel,'' said Tjandra Kartika, an analyst at G.K. Goh Research Pte. in Singapore. ``But they haven't really exercised their right with the golden share anyway because they're a majority shareholder -- it would be a bigger impact if their stake falls below 50 percent.''
Failed Acquisitions
Last year, SingTel lost in its attempt to buy Cable & Wireless HKT Ltd., the dominant Hong Kong phone company. HKT's U.K. parent, Cable & Wireless Plc, also Optus' biggest shareholder, rejected the SingTel bid and sold HKT to Pacific Century CyberWorks Ltd., an Internet start-up controlled by Richard Li, son of Hong Kong billionaire Li Ka-shing.
SingTel also failed last year to buy part of Time Engineering Bhd., which manages Malaysia's biggest fiber-optics network. Since then, the company has been trying to make its shareholding more palatable to foreign investors. The government also said it wants to reduce its stake in SingTel in the ``medium term,'' without being more specific
Based on SingTel's S$1.78 share price, the stock and cash offer for Optus is valued at about A$14 billion ($7 billion). SingTel is in talks with Australia's defense department on what its acquisition means for an Australian military satellite joint venture with Optus.
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