- Singtel and KKR will acquire the remaining 81.7% stake in ST Telemedia Global Data Centres (GDC) for S$6.6bn in cash. Singtel and KKR will own 25% and 75% of GDC, respectively. The transaction is expected to be completed 2H26, and no shareholder approval is required. Singtel will fund by debt and internal cash.
- GDC operates 50 data centres in 12 countries with a power capacity of 673MW. Year ended Dec 2024, GDC has a book value of S$5.3bn and reported a net loss of S$185mn. The estimated EBITDA is S$346mn. The proforma financial impact on Singtel's net earnings is less than 1%.
- We view the transaction positively as a growth funnel for Singtel post ST28. There is a pipeline of projects that could triple existing GDC capacity. And GDC operates largely in the underpenetrated data centre market in Asia-Pacific. We expect earnings and cash flow growth from additional data centres. There is also an opportunity to enhance value by listing selected Asian assets. The financial impact is minimal. There is no earnings contribution in the near term, as GDC reported a net loss. We maintain our ACCUMULATE recommendation with an unchanged target price of S$5.35.
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