NetLinkNBN Trust to raise up to S$2.63 billion in July IPO; largest listing since HPH Trust

The business trust expects to raise net proceeds of up to S$2.63 billion by issuing 2.9 billion units at between 80 Singapore cents and 93 Singapore cents per unit.
The business trust expects to raise net proceeds of up to S$2.63 billion by issuing 2.9 billion units at between 80 Singapore cents and 93 Singapore cents per unit. PHOTO: NETLINK TRUST

SINGAPORE - Singtel's fibre broadband unit NetLinkNBN Trust has lodged a preliminary prospectus for a listing on the Singapore Exchange (SGX) mainboard, with plans to start trading on July 19.

The business trust expects to raise net proceeds of up to S$2.63 billion by issuing 2.9 billion units at between 80 Singapore cents and 93 Singapore cents per unit.

This would make it the biggest listing here since Hutchison Port Holdings Trust, which raised US$5.5 billion ($7 billion) in 2011.

Immediately after the initial public offering (IPO), NetLinkNBN Trust will have a market capitalisation of between S$3.09 billion (based on the 80 cents offer price) and S$3,593.5 million (based on the 93 cents offer price).

The size of the public and placement tranches has not yet been decided, but new SGX rules require mainboard aspirants to allocate at least 5 per cent or S$50 million of the IPO to the public tranche.

The public offer will open at 5pm on July 10 and close at noon on July 17.

The trust has forecast an annualised distribution yield of between 4.73 per cent to 5.50 per cent in 2018, depending on the IPO price.

NetLink designs, builds, owns and operates the passive infrastructure for Singapore's Next Generation Nationwide Broadband Network (NextGen NBN), over which ultra-high-speed internet access is delivered throughout the island.

NetLink's passive infrastructure comprises about 76,000 km of fibre optic cable, 16,200 km of ducts, and 62,000 manholes.

The network allows NetLink to sell wholesale dark fibre services to requesting licensees like Singtel, StarHub, M1 and MyRepublic. These licensees manage the active infrastructure like switches and routers, and act also as retail service providers, which sell the bandwidth with value-added services to end-users.

Singtel is Netlink's sole unitholder.

Under rules laid down by the infocomm regulator requiring "structural separation", Singtel was forced to divest itself of more than 75 per cent of NetLink Trust before April next year. The original deadline was April 2014, but Singtel asked for an extension.

NetLink will be managed by NetLink NBN Management.

DBS, Morgan Stanley and UBS are the joint issue managers and joint global coordinators.

Morgan Stanley is the stabilising manager.