Tuas ends S$1.43b M1 deal amid IMDA probe

Tuas Limited has terminated the sale and purchase agreement for its unit Simba Telecom to acquire Keppel’s stake in Singapore mobile operator M1. The transaction had been valued at S$1.43 billion, or about US$1.12 billion, before its termination.

The agreement included a long-stop date of May 21, by which key conditions precedent had to be fulfilled. Tuas said these conditions were not met by that date, causing the agreement to lapse and automatically releasing both Tuas and Keppel from their obligations under the deal.

The collapse of the planned transaction ends a significant proposed reshaping of Tuas’s Singapore telecommunications footprint through the acquisition of Keppel’s interest in M1.

Singapore’s Infocomm Media Development Authority (IMDA) has suspended its review of the proposed acquisition following developments around the deal. At the same time, the regulator has opened an investigation into Simba Telecom’s use of radio frequencies.

IMDA is probing whether Simba used radio frequency bands that were not assigned to it. The regulator has said that any such use could breach the country’s Telecommunications Act as well as the conditions of Simba’s facilities-based operator licence.

The regulatory scrutiny over spectrum use has become a central issue surrounding Simba and Tuas, coinciding with the lapse of the S$1.43 billion M1 transaction.

Tuas has stated that Simba Telecom is cooperating with the IMDA investigation into its radio frequency usage. The company has indicated that it is engaging with the regulator as the probe proceeds.

Despite the terminated agreement and ongoing regulatory review, Tuas said Simba will continue to operate its Singapore telecommunications business. The company has also committed to keeping shareholders updated on material developments related to the investigation.

The continuation of Simba’s operations suggests that, for now, its existing services remain in place while regulatory questions are examined.

The combination of the lapsed M1 acquisition and the IMDA’s announcement of an investigation triggered a sharp reaction in financial markets. According to Tuas, its shares fell by more than 60% on the Monday following the regulator’s statement.

The steep share-price decline reflects investor concern over both the loss of the S$1.43 billion acquisition opportunity and the potential implications of the regulatory probe into Simba’s spectrum use.

Tuas has not provided additional financial guidance in relation to the terminated deal but has emphasised its intention to maintain transparency with investors as the situation evolves.