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NetLink NBN Trust Kicks Off Singapore’s Largest IPO Since 2011: 5 Quick Things to Know

The big day has arrived. NetLink NBN Trust’s initial public offering (IPO) is open for business.

The IPO offer went live on yesterday at 7:00 pm and will close at noon on 17 July 2017. The offering price settled at $0.81 per unit, with 185 million units on offer to the public. The Motley Fool Singapore was invited to a media briefing as part of the IPO launch. I attended and took the following notes:

1. The NetLink NBN Trust IPO is billed as the largest IPO in Singapore since 2011 – that’s when container port owner Hutchison Port Holdings Trust (SGX: NS8U) went public. Morgan Stanley Managing Director Vijay Vaidyanathan added that the NetLink NBN Trust IPO will be the second largest IPO in Asia this year, after Korea’s NetMarble.

2. The offer price of $0.81 per unit was at the low end of the indicative range ($0.80 to $0.93) that NetLink NBN Trust projected in its preliminary IPO prospectus. The trustee manager’s chief executive officer, Tong Yew Heng, said that there was strong interest from institutional investors.

3. Based on the IPO price, the annualised yield for the business trust’s financial year ending 31 March 2018 (FY2018) is expected to be 5.43%. For FY2019, the projected yield is expected to be 5.73%. NetLink NBN Trust’s distribution policy is to distribute 100% of its cash available for distribution.

4. NetLink NBN Trust is putting up almost 2.9 billion units for the IPO, with 185 million units catered for the public in Singapore. The remaining 2.7 billion units were reserved for institutional investors and other groups of investors in Singapore. The IPO’s base offer size is worth $2.3 billion.

5. Prior to the IPO, Singapore Telecommunications Limited (SGX: Z74) had full economic ownership of NetLink NBN Trust. Singtel’s stake will be reduced to 24.99% after the IPO is completed. NetLink NBN Trust is expected to have a market cap of $3.1 billion upon listing.

If you would like to learn more about the trust, here are a few articles covering various aspects of the business:

1. A brief walk through NetLink NBN Trust’s history – head here

2. The business of NetLink NBN Trust explained – head here

3. The potential of NetLink NBN Trust – head here

4. NetLink NBN Trust’s projected growth – head here

5. NetLink NBN Trust’s two high growth areas – head here

6. NetLink NBN Trust’s view on why wireless mobile is not a threat – head here

Stay tuned for more articles in the coming week.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.