In what will be an interesting benchmark for the telco sector, Singapore's second biggest telecoms company, StarHub wants to raise S$1.7 billion ($942.6 million) from the loan market. As one banker commented: "This is a very big loan by Singapore standards."
StarHub has sent out a request for proposals and has set a deadline of April 30, for receiving them. Two consortia are believed to be front runners to win the mandate. One centres around BNP Paribas, Citibank, HSBC, OCBC and UOB; the other around ABN AMRO and DBS.
Bankers say the deal has rarity value as one of the few non-property loans to emerge from Singapore. However, this is counterbalanced by the fact that telecoms lending has been out of favour and StarHub is losing money.
StarHub has just restated its financial year, but put out a financial statement to December 31 (for the previous nine months) which stated it had negative EBITDA of S$83 million in that period on revenues of S$437 million. That was an improvement on negative EBITDA of S$188 million in the previous 12 months.
StarHub generates 59% of its revenues from mobile, has 460,000 mobile subscribers and a 16% market share in cellular. It also has 12% of the IDD market and has installed its broadband network in 600 commercial buildings in Singapore's central business district.
Its shareholders are Singapore Technologies, the UK's BT and Japan's NTT. Its CFO, Henry Lim has worked with Singapore Technologies since 1987.
StarHub said in 1999 that it needed to spend S$2.6 billion on infrastructure and its last financing foray was in that same year when it raised S$825 million through a project finance facility via ABN AMRO.
