SingTel launches $2bn broadband infra trust IPO

The NetLink NBN Trust, which runs a 76,000km fibre optic network across the island, is expected to provide an annual yield of around 5%.

Singapore Telecommunications (SingTel) is listing an infrastructure trust for its broadband subsidiary, which runs a 76,000km fibre optic network across the island, to raise as much as S$2.69 billion ($1.95 billion; €1.7 billion) on Singapore’s stock exchange.

The state-owned telco giant said it has lodged a preliminary prospectus with the Monetary Authority of Singapore through its trustee manager, NetLink NBN Management, in what is sure to be one of the biggest infrastructure trust listings in years. 

The IPO will see SingTel divest its stake in NetLink NBN Trust from 100 percent ownership down to less than 25 percent by 22 April 2018. The divestment is according to the “structural separation” rules under the Info-communications Media Development Authority.

The 2.9 billion units on sale are priced at between S$0.8 and S$0.93 per unit. 

The trust has forecast an annualised distribution yield of between 4.73 percent and 5.5 percent next year, and between 4.99 percent and 5.8 percent for 2019, according to the preliminary prospectus. 

The offer will open at 5pm on 10 July and the stock will debut for trading on the Singapore stock exchange on 19 July. After the IPO, the trust is expected to have a market capitalisation of between S$3.09 billion and S$3.59 billion.
The proceeds from the IPO will be used to buy SingTel’s broadband assets and repay about S$1.1 billion of loans owed to SingTel. 

The NetLink trust designs, builds, owns and operates the passive infrastructure for Singapore’s Next Generation Nationwide Broadband Network, which delivers ultra-high-speed internet access across the island, with Singtel as its sole unitholder. 

As of end of this March, NetLink Trust has a network of 10 central offices, 76,000 km of fibre cable, 16,200 km of ducts and 62,000 manholes. Its services cover about 76 percent of all residential premises “home passed” in Singapore, as well as 31 percent of the corporate wired broadband connections.