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KKR Consortium to invest £1Bn in ST Telemedia Global Data Centres expansion

Written by Wed 19 Jun 2024

Data centre colocation provider, ST Telemedia Global Data Centres (STT GDC), global investment firm, KKR, and communication technology group, Singtel, have announced the signing of a definitive agreement for a KKR-led Consortium to invest £1 billion ($1.3 billion) in STT GDC.

This transaction marks the largest digital infrastructure investment in Southeast Asia to date in 2024.

The transaction involves an initial investment of £1 billion ($1.3 billion) by the Consortium through Redeemable Preference Shares (RPS) with detachable warrants. If the warrants are fully exercised, the Consortium will invest an additional £723 million ($920 million).

“With the industry experiencing unprecedented cloud and AI-led growth, this strategic partnership with KKR and Singtel will be a significant catalyst for STT GDC’s next chapter of growth as a leader in the digital infrastructure industry,” said Bruno Lopez, President and Group CEO at STT GDC.

The investment proceeds aims to enhance STT GDC’s market position and support its international expansion and growth through both organic and inorganic strategies. After the transaction, ST Telemedia remains the majority shareholder of STT GDC.

“Together, we look forward to leveraging our global network and expertise investing in digital infrastructure to power STT GDC’s continued success and international expansion, and to help it to achieve its next phase of transformation,” said David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure, KKR.

The Consortium was chosen by STT and STT GDC through an independent, competitive process that evaluated their expertise, track record, financial strength, and business strategy.

KKR is making this investment from its Asia Pacific Infrastructure Investors II Fund.

Recent Developments and Future Prospects

This Consortium follows the commitment from KKR at the Indo-Pacific Partnership for Prosperity to enhance infrastructure in the Indo-Pacific region, marking its latest digital infrastructure investment in Southeast Asia and globally. 

Previous investments in Southeast Asian digital infrastructure include Nxera, a Singapore-headquartered data centre platform serving Asia Pacific; Pinnacle Towers, a digital infrastructure platform in Asia with a strong focus on the Philippines; and OMS Group, a leading neutral subsea telecommunications cable services provider.

Singtel, a leading provider of connectivity, digital services, and digital infrastructure, considers data centres a critical part of its business.

“This is a solid opportunity for Singtel to gain exposure to an established platform with a footprint in high-quality data centre markets and aligns with our Singtel28 strategy to further scale our digital infrastructure business in collaboration with like-minded partners,” said Arthur Lang, Group Chief Financial Officer at Singtel.

In November, KKR raised £2.2 billion ($2.8 billion) at the close of its second global impact fund. Global Impact Fund II is focused on investing in companies whose products and services contribute measurable progress toward the United Nations Sustainable Development Goals.

In September 2023, KKR acquired a 20% stake in Nxera, Singtel’s regional data centre business.

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Written by Wed 19 Jun 2024

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