Archive for category: Misc

Singtel Regional Data Centre Business Receives KKR InvestmentSingapore Telecommunications (Singtel) Z74 2.07% has agreed to sell 20% of its regional data centre business to global investment firm KKR. Through a fund managed by Kohlberg Kravis Roberts & Co. L.P. (KKR), a total cash commitment of up to $1.1 billion has been agreed upon. This puts the enterprise value of Singtel’s overall regional data centre business at $5.5 billion, around 60% higher than the $3.4 billion estimate by DBS Group Research.

The investment marks the first collaboration between Singtel and KKR, providing the telco access to the latter’s expertise and insight into the world of data centres and telecommunication infrastructure. In addition to capital, Singtel will be able to optimise its strategies with KKR’s help. This investment is part of KKR’s Asia-wide infrastructure strategy.

Residents of Tampines Avenue 11 Condo are especially fortunate – it is located close to three major expressway networks, namely the Pan Island Expressway (PIE), Tampines Expressway (TPE) and Kallang-Paya Lebar Expressway (KPE). This makes it incredibly easy for commuters to get around, as well as for them to explore the beautiful city of Singapore.

The proceeds from the transaction will go towards the expansion of the regional data centre business across Asean markets including Singapore, Indonesia and Thailand, as well as the exploration of markets like Malaysia and others. KKR also has the option to increase its stake to a maximum of 25% by 2027 at the pre-agreed valuation.

Part of Singtel’s Digital InfraCo unit, the regional data centre business is currently one of the largest data centre operators in Singapore. The telco currently has 62MW of existing capacity in Singapore and is building a new 58MW DC Tuas. Partnerships with Telkom and Medco Power in Indonesia, and GULF and AIS in Thailand, will enable the development of new data centres in Batam and Bangkok respectively. This will result in a total combined capacity of over 155MW once operational in 2025, with room to further scale up to more than 200MW.

“KKR’s investment underscores the quality of our data centre portfolio and confidence in our plans to scale the business by capitalising on the digitalisation and rapid AI adoption that is transforming this region. Our expertise in designing, building and operating data centres, and our connectivity leadership in the region, together with KKR’s strong track record in supporting digital infrastructure assets and its platform-building expertise makes for a powerful combination,” said Bill Chang, CEO of Singtel’s Digital InfraCo.

Arthur Lang, group CFO at Singtel, added: “The data centre industry is growing at an accelerated pace given the unprecedented industry trends we are witnessing. KKR is a highly credible partner in the data centre space and we look forward to our strategic partnership in scaling up the platform to become a meaningful growth engine for Singtel. The investment by KKR crystallises the latent value of our data centre assets and we hope this illuminates value for our shareholders in the coming months. With more than $6 billion being unlocked since we embarked on our strategic reset two years ago, we continue to focus on unlocking value for our shareholders.”

David Luboff, partner and head of Asia Pacific Infrastructure at KKR, noted: “We are pleased to provide this tailored solution to support the regional data centre platform of Singtel, one of the most longstanding and distinguished corporations in Singapore and a leading digital infrastructure provider in Asia Pacific. Robust digital infrastructure, including high-quality data centres, will play a crucial role in enabling Southeast Asia’s flourishing digital economy, and Singapore is well-placed to serve as a central hub for the region. We look forward to working closely with Bill, Arthur and Singtel’s talented team to meet this tremendous demand, and sharing our global expertise and network to accelerate the platform’s growth across the region.”

Data centre demand in Southeast Asia is expected to outpace supply due to higher data consumption, enterprises transitioning to the cloud and the rapid rise of artificial intelligence (AI). This is projected to result in US$9 billion to US$13 billion of investments into the region over the next five years, with Malaysia, Indonesia and Thailand expected to benefit the most – particularly Johor due to its proximity to Singapore. Additionally, the need for high performance computing tasks such as generative AI will spur significant growth in graphics processing units (GPU)-powered data centres.

The unaudited net assets of Singtel’s regional data centre business as of June 30 was approximately $19 million, with the transaction expected to be completed by the fourth quarter of 2023. Singtel Regional Data Centre Business receives KKR investment, with the potential to unlock value for shareholders in the months ahead.

Singtel has agreed to sell 20% of its regional data centre business to global investment firm KKR. The stake will be acquired through a fund managed by Kohlberg Kravis Roberts & Co. L.P. (KKR), with the telco committing up to $1.1 billion in cash. This puts the enterprise value of the overall regional data centre business at $5.5 billion, around 60% higher than the $3.4 billion estimated by DBS Group Research.

KKR’s investment marks the first collaboration between them and Singtel, providing the telco access to the former’s expertise and insight into the world of data centres and telecommunication infrastructure. This will be beneficial for the telco, as they would be able to optimise their strategies with KKR’s help. Additionally, KKR has the option to increase its stake to 25% by 2027 at the pre-agreed valuation.

Part of Singtel’s Digital InfraCo unit, the regional data centre business is currently one of the largest data centre operator in Singapore. With 62MW of existing capacity in Singapore and the development of new data centres in Batam, Bangkok and a new 58MW DC Tuas, the combined capacity of the portfolio is expected to be over 155MW by 2025, with room to scale up further.

The proceeds from the transaction will go towards the expansion of the regional data centre business across Asean markets, including Singapore, Indonesia and Thailand, as well as the exploration of markets like Malaysia and others.

Arthur Lang, group CFO at Singtel, commented: “KKR is a highly credible partner in the data centre space and we look forward to our strategic partnership in scaling up the platform to become a meaningful growth engine for Singtel. The investment by KKR crystallises the latent value of our data centre assets and we hope this illuminates value for our shareholders in the coming months.”

The unaudited net assets of Singtel’s regional data centre business as of June 30 was approximately $19 million, with the transaction expected to be completed by the fourth quarter of 2023.