Singtel to delist from ASX, still on SGX
By Digital News Asia April 22, 2015
- Says low trading volume, liquidity and market demand for Singtel CDIs
- Delisting subject to formal approval from ASX; all other approvals obtained
SINGAPORE Telecommunications Limited (Singtel) said it has formally requested approval from ASX Limited to remove its listed securities, in the form of Chess Depositary Interests (CDIs), from the official list of the Australian Securities Exchange (ASX).
Singtel shares will continue to be listed on the Singapore Exchange (SGX), and trading on SGX will continue during and after the ASX delisting process, the company said in a statement.
Each Singtel CDI represents a beneficial interest in the equivalent of one Singtel share listed on SGX, it added.
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Singtel said its business and operations in Australia will not be affected by the proposed delisting.
Singtel was admitted to the official list of the ASX in September 2001 in connection with its acquisition of Singtel Optus Pty Limited (Optus).
There will be no change in Singtel’s business strategy as it remains committed to growing and investing in its Australian business, the company said.
Since its acquisition, Singtel has invested over A$13 billion (US$10.2 billion) in building infrastructure and improving communication services in Australia.
However, in recent years, the number of Singtel CDIs on issue has declined significantly and as at March 31 2015, represented only approximately 137 million of the 15.94 billion Singtel shares issued, or 0.86% of Singtel’s issued capital.
Daily trading volumes and liquidity of Singtel CDIs on the ASX are also very low. During the 12 months to March 31 2015, the number of Singtel CDIs traded on the ASX accounted for only 6% of all Singtel shares traded.
This reflects institutional investors’ preference to hold and trade Singtel shares on its home exchange, SGX.
With little demand to drive liquidity in its CDIs, Singtel's weighting in the S&P/ ASX200 index has been reduced to approximately 0.03% as at March 31. This further diminishes the broader market appeal of Singtel CDIs, the company said.
There is increased likelihood that Singtel’s index weighting will be further reduced over time, it added.
After careful consideration, the Singtel board has determined that there are minimal shareholder benefits from maintaining Singtel’s listing on ASX. The delisting will also have the effect of reducing the costs arising from dual listing requirements, it added.
As part of the delisting, CDI holders will be provided with a number of options that will enable them to either:
- Maintain their exposure to Singtel by converting their Singtel CDIs into Singtel shares listed on the SGX on a 1:1 basis; or
- Sell their interests in Singtel shares on the SGX through Singtel-arranged sale facilities.
In the meantime, Singtel CDI holders will continue to be able to sell their CDIs on ASX ahead of the delisting by instructing their stockbroker or financial advisor.
If ASX gives its approval to the delisting, trading in Singtel CDIs is expected to be suspended with effect from close of trading on ASX on May 29. Singtel CDI holders will not be able to trade their Singtel CDIs on ASX after this date.
Removal of Singtel CDIs from the official list of the ASX is expected to occur on June 5. This means Singtel will cease to be an ASX-listed entity on this date, the company said.
Singtel will notify the market and CDI holders by announcement to SGX and ASX if there are any changes to such indicative dates.
ASX has advised that it is likely to agree to the removal of Singtel CDIs from the official list of the ASX, subject to certain conditions being satisfied.
All other formal regulatory and government approvals required for the proposed delisting of Singtel CDIs, including Foreign Investment Review Board considerations, have been obtained.
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