Gulf Energy Development submitted a $5.4 billion bid for Intouch Holdings, which controls a 40.45 per cent stake in mobile operator AIS.
The transaction is at an early stage and requires approvals from Gulf Energy Development shareholders and regulators. The acquisition of Intouch and AIS would substantially broaden the energy company’s revenue base and diversify its cash flow.
Fitch Ratings said it will likely put AIS’ ratings on its watch list if the buyout happens.
In a research note, the agency said it remains unclear how Gulf Energy Development intends to fund the deal, noting the tender offer for all shares in AIS will depend on it acquiring at least 50 per cent of Intouch, up from a current 19 per cent.
Intouch and AIS are 21 per cent and 23 per cent owned by Singtel respectively.
Fitch Ratings noted the tender offer would provide financial flexibility for Singtel to fund its 5G investments, ease pressure on free cash flow and offer long-term strategic value. It added Singtel’s investments in Intouch and AIS provide a stable source of cash flow and contribute 20 per cent to total dividends received.
Intouch also controls a 41.1 per cent stake satellite operator Thaicom, but Gulf Energy Development stated it does not plan to acquire the asset.
GSMA Intelligence data showed AIS had a 45 per cent share of total mobile connections (excluding IoT) at end-March.Subscribe to our daily newsletter Back