Singtel's fibre broadband unit NetLink NBN 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 $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 Hutchinson Port Holdings Trust, which raised US$5.5 billion (S$7.6 billion) in 2011.
NetLink NBN Trust will have a market cap of between $3.09 billion and $3.59 billion immediately after the initial public offering (IPO).
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 $50 million of the IPO to the public. 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 and 5.5 per cent next year, based on the IPO price range.
NetLink NBN builds and operates the passive infrastructure for Singapore's Next Generation Nationwide Broadband Network, which delivers ultra high-speed Internet access across the island.
NetLink NBN's passive infrastructure comprises about 76,000km of fibre optic cable, 16,200km of ducts and 62,000 manholes. The network allows NetLink NBN to sell wholesale dark fibre services to requesting licensees like Singtel, StarHub, M1 and MyRepublic.
These licensees manage the active infrastructure such as switches and routers, and also act as retail service providers, which sell the bandwidth with value-added services to end users.
Singtel is NetLink NBN's sole unit holder. Under rules laid down by the infocomm regulator requiring "structural separation", Singtel is forced to divest itself of more than 75 per cent of the trust before April next year.
NetLink NBN, which recorded a net profit of $79.4 million in the year ended March 31 on revenue of $299 million, 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.
Singtel shares rose one cent or 0.26 per cent to $3.80 yesterday. In February, the telco told a results briefing that the proceeds from the NetLink NBN IPO could go towards funding other growth opportunities, with a portion of anything above that to be returned to shareholders.
NetLink NBN will be the third company to list on the mainboard this year.
Earlier this month, recruitment firm HRnetGroup made its debut. It now trades at 89 cents, below its IPO price of 90 cents.
Business trusts could also face some investor ambivalence. Hutchinson Port Holdings Trust has never closed higher than its US$1.01 offer price. The units closed at 42 US cents yesterday.