KKR-Singtel consortium pledges $1.3b to ST Telemedia’s data center arm

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A consortium led by global investment firm KKR and telco giant Singtel is injecting US$1.3 billion into ST Telemedia Global Data Centres (STT GDC), its largest investment in Southeast Asia for the year.

The transaction, which is subject to regulatory approvals, will be made via redeemable preference shares with detachable warrants. If the investing parties choose to exercise the warrants in full, the consortium’s total investment can go up to about US$2.2 billion.

Majority ownership of STT GDC will remain with Singapore-based ST Telemedia, whose holdings include a stake in Singtel rival StarHub. ST Telemedia is a portfolio company of state-owned investor Temasek.

The investment follows the string of the similar multimillion commitments by big tech companies in Southeast Asia as they diversify their data centers amid AI’s rise.

In a statement, Singtel CFO Arthur Lang noted that digital infrastructure, particularly data centers, are a “compelling investment with the remarkable rise of the sector, driven by rapid digitalization and AI adoption around the world.”

Singtel itself has raised funding for its regional data center business from KKR, which poured US$806 million in 2023.

The KKR-Singtel consortium’s investment would put STT GDC at the forefront the data center industry in Southeast Asia and beyond. The company has over 95 data centers across 11 countries including Japan, South Korea and the UK.

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