KKR & Singtel lead SGD $1.75 billion investment in STT GDC

ST Telemedia Global Data Centres (STT GDC), KKR, and Singtel have jointly announced the signing of definitive agreements for a major investment in STT GDC. The transaction, led by KKR and involving an investment consortium that includes Singtel, will see an investment of SGD $1.75 billion (approximately USD $1.3 billion) in STT GDC, marking the largest digital infrastructure investment in Southeast Asia in 2024.

The investment will be made through Redeemable Preference Shares (RPS) with detachable warrants. If the warrants are fully exercised, the consortium could potentially invest an additional SGD $1.24 billion (roughly USD $920 million). STT and STT GDC selected the consortium following an independent competitive process, which evaluated factors such as expertise, financial strength, and strategic vision.

Bruno Lopez, President and Group CEO of STT GDC, expressed enthusiasm for the new partnership. "We are thrilled to welcome KKR and Singtel, two blue-chip investors in the digital infrastructure space, into the STT GDC group. Since our inception 10 years ago, STT GDC has developed into a leading data centre provider with a significant footprint in Asia, UK, and Europe, supporting the growth of the world's largest cloud and enterprise customers. 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," Lopez said.

David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure, also emphasised the significance of the investment. "Data centres serve as an important backbone of the digital infrastructure that enables an increasingly digital economy and many critical industries globally. Our investment in STT GDC is a rare opportunity to support the growth of a leading data centre platform with a terrific track record of growth and significant potential, whilst deepening our existing collaboration with Singtel. 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 achieve its next phase of transformation," Luboff stated.

Arthur Lang, Group Chief Financial Officer of Singtel, remarked on this collaboration's strategic and financial benefits. "We see digital infrastructure, particularly data centres, as a growth asset and compelling investment with the remarkable rise of the sector driven by rapid digitalisation and AI adoption around the world. Given our joint expertise in digital infrastructure, we are pleased to participate in this fundraising with KKR, deepening our relationship since its investment in our regional data centre arm Nxera last September. 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," Lang said.

Stephen Miller, President and Group CEO of ST Telemedia, highlighted the growth opportunities for STT GDC. "Since founding STT GDC, we have steadfastly supported its evolution and growth. Today's announcement marks another important milestone for STT GDC with the introduction of two new marquee investors to enhance its global growth strategies. As a strategic investor and shareholder, STT looks forward to working closely with our new partners to propel STT GDC in its exciting next phase of global growth," Miller said.

KKR is making this investment through its Asia Pacific Infrastructure Investors II Fund, aligning with its broader strategy to fortify digital infrastructure in the Indo-Pacific region. Past initiatives in Southeast Asian digital infrastructure include Nxera, Pinnacle Towers, and OMS Group.

The transaction is subject to usual conditions precedent, including regulatory approvals. Following the transaction, ST Telemedia will remain the majority shareholder of STT GDC. Singtel continues to play a pivotal role in the connectivity and digital services arena, with data centres being a critical component of its business strategy.