Fibre network owner NetLink NBN Trust launched its S$2.3 billion ($1.66 billion) initial public offering (IPO) on the SGX Mainboard. The business trust is offering nearly 2.9 billion units priced at 81 cents each, close to the bottom of the initial pricing range of between 80 cents and 93 cents.
The offering of units, subject to the over-allotment option, consist of an international placement of 2.71 billion units to investors, including institutional and other investors in Singapore via a placement tranche and a public offer of 185 million units.
Based on the Offering Price of S$0.81, the NetLink Group offers investors an annualised distribution yield of 5.43 per cent for Forecast Period 2018 and a distribution yield of 5.73 per cent for Projection Year 2019 respectively.
Tong Yew Heng, chief executive of the trustee-manager, has expressed satisfaction with the offer price, which values the business trust at approximately S$3.1 billion.
Tong said, “We are pleased with the strong support for our IPO, underscored by strong interest from quality institutional investors. This reflects investors’ confidence in the stability and growth potential of our business, as well as an appreciation of the NetLink Group’s unique investment proposition. We had a very diverse and quality mix of investors. From our standpoint, the demand has been very healthy and strong.”
The NetLink Group plays a fundamental role in the delivery of fibre services throughout Singapore. It is the sole appointed “Network Company” for Singapore’s Next Generation Nationwide Broadband Network (Next Gen NBN).
As of 31 March 2017, the NetLink Group’s network had passed 1.4 million residential homes and was deployed to approximately 30,000, or substantially all of the non-residential buildings in Singapore.
Its network has been developed within a regulatory framework that aims to enhance the competitiveness of the Singapore economy. The government’s continued investment in digital initiatives, including the Smart Nation Programme, supports demand for the NetLink Group’s network as the enabling infrastructure.
As it operates an extensive nationwide network, future capital expenditure will be largely limited to network maintenance and network expansion to cover additional residential homes, non-residential premises and NBAPs.
It is likely to experience strong positive after-market performance and is one of the largest in Asia for this year, second to the IPO of South Korean mobile gaming company Netmarble Games Corp, which raised 2.7 trillion won ($3.1 billion) in May.