BT set to pull out of Singapore

BT GROUP is moving closer to offloading its minority stake in Singapore mobile and cable company StarHub as the Asian group revives plans for an initial public offering.

StarHub, the second-largest telecoms player in the city state, is 11.9% held by BT, which has described the stake as 'non-strategic' and has been looking for an exit strategy.

StarHub has been talking to investment bankers about 'valuation dynamics', spokeswoman Jeannie Ong said today, adding that there remained a desire to list this year or in 2005.

But she added that StarHub had not yet 'started the IPO process', refuting local and regional reports that bankers had already been asked to submit listing proposals to StarHub, with a winner to be named before next month. 'We talk to bankers all the time,' said Ong.

StarHub is worth an estimated S$3bn (£948.5m), which would value BT's entire holding at £113.6m.

If the listing goes through, the divestment would fit with BT's strategy of selling off scattered minority holdings across the region.

StarHub made preparations to list three years ago during the hitech boom, but failed to get to market-at that stage. Since then shareholders have been waiting for a return of more favourable market conditions.

This time round much will depend on decisions by StarHub's top shareholder, State-linked Singapore Technologies Telemedia, which controls a little more than 50% of StarHub.

ST Telemedia, itself controlled by State investment company Temasek, has several complementary telecoms assets that it may wish to list in concert with StarHub, complicating any sale process.

Other StarHub shareholders include Japanese telecoms giant Nippon Telegraph and Telephone (14%), media group Singapore Press Holdings (9%), and Singapore broadcaster MediaCorp (14%).

BT officials were not available for comment.

Since privatisation in 1981 the company has had mixed fortunes overseas. After a failed tie-up with MCI in America in 1996, BT went on an expansionist spree and, with AT&T, took a 30% stake in Japan Telecom.

As the technology bubble burst the firm began to withdraw from most of its Asian operations. In early 2001, as BT sought to control spiralling debts, it sold its stakes in Japan Telecom and J-Phone Communications to Vodafone and said it wanted to concentrate again on its