Thai unrest stalls Temasek efforts to offload Shin Corp to SingTel unit

Singapore state investor Temasek is seeking to sell its US$3.1 billion stake in Thai telecommunications company Shin Corp, according to people familiar with the matter, and has approached its SingTel unit as a possible buyer.

Temasek Holdings, which owns 41.6 per cent of Shin through a subsidiary, held talks with Singapore Telecommunications, as SingTel is formally known, late last year, said the people. Those discussions have since stalled amid political tensions in Thailand, they said.

The Temasek stake in Shin, founded by former Thailand prime minister Thaksin Shinawatra, is worth US$3.1 billion by current market value. In 2006 Temasek led a group of investors including Surin Upatkoon, a Chinese-Thai businessman, that bought 96 per cent of Shin for US$3.8 billion. Temasek did not disclose how much it paid for its holding.

The move by Temasek to sell its ownership in Shin is consistent with other attempts by the state investor to consolidate some portfolio companies. This would be Temasek's first attempt to bring part of its telecommunications operations in the region under one roof, analysts said.

However, some of its past consolidation efforts have failed to bear fruit. Last year its financial services portfolio company DBS Group Holdings made a bid for Bank Danamon Indonesia, but it failed to get approval from the Indonesian regulator.

The slowdown in deal talks for Shin makes it the second potential transaction in Thailand to be put on the back burner because of a political stalemate. ING Group's planned sale of a 31 per cent stake in TMB Bank has also hit roadblocks.