Netlink NBN Trust IPO raises USD1.72bn

20 Jul 2017

The much-anticipated public listing of Netlink NBN Trust, the former Singtel Group company tasked with designing, building, owning and operating the country’s next generation broadband network (Next Gen NBN), has raised about SGD2.35 billion (USD1.72 billion) – resulting in a sizeable windfall for the Southeast Asian telco. ‘We will realise a gain on the disposal of the shares in excess of about SGD1.8 billion,’ Singtel Group CEO Chua Sock Koong told CNBC on the sidelines of Wednesday’s listing ceremony at the Singapore Exchange. The fibre infrastructure provider’s successful IPO marks the largest float on the Singapore Exchange in six years and the city-state’s largest business trust listing to date. The initial public offering of 2.9 billion units was oversubscribed with strong support from both institutional and retail investors.

On the proceeds from the listing, Chua said: ‘We will use that to pay down debt, investments in our existing business, investments in growth initiatives, and we’re looking at other capital management initiatives.’ Singtel’s options include improving its balance sheet or issuing a special dividend, although for now it is assessing its options to decide the best course of action for its stakeholders. The windfall could also be used to fund acquisitions – given that Singtel is struggling to find growth in a mature home market, and one that is soon to see fresh competition in the shape of new fourth operator TPG Telecom. Ms Chua has not ruled out this option either, noting that Singtel has ‘always been looking at investments that would enhance our growth outlook’.

Singtel now owns 24.99% of NetLink NBN Trust following the IPO, fulfilling its undertaking to Singapore’s regulator to cut its 100% stake to less than 25% before April 2018. The trust owns a network of approximately 76,000km of fibre-optic cables, 16,200km of ducts and 62,000 manholes – connecting both residential and non-residential locations on the island nation.

Singapore, Singtel Group