ST Engineering unit, SP Group to sell joint venture for S$290 million to Singapore fund manager
ST Engineering is expected to get a one-off gain of around S$80 million from the proposed sale
[SINGAPORE] ST Engineering’s wholly owned subsidiary, ST Engineering Urban Solutions, has entered into an agreement with SP Group to divest their joint venture SPTel, an enterprise broadband connectivity provider.
The buyer is AQX, a digital infrastructure investment platform wholly owned by home-grown private equity firm Seraya Partners. It will acquire SPTel for a sale consideration of S$290 million, subject to closing adjustments.
On Thursday (Jul 17), ST Engineering and SP Group said the proposed transaction will better position SPTel to scale under a new owner.
“(It) will enable SPTel to grow under a new owner whose primary mandate is in investing and growing digital infrastructure platforms,” they said.
Divestment proceeds will be distributed to the sellers in proportion to their shareholdings in SPTel, which is 51 per cent owned by ST Engineering Urban Solutions and 49 per cent owned by SP Group.
The proposed sale is expected to yield a one-off gain of around S$80 million for ST Engineering based on its carrying value for SPTel of around S$65 million.
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Besides this, it is not expected to have material impact on ST Engineering’s consolidated net tangible assets per share and earnings per share for the current financial year.
Additionally, the sellers may receive an earn-out amount of up to S$15 million if certain buyer’s return thresholds are met in the future, ST Engineering and SP Group said.
The proposed transaction is expected to close in Q4 2025.
The counter ended Wednesday 0.1 per cent or S$0.01 higher at S$8.34.
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