Singapore Telecommunications : Registration of NetLink NBN Trust's prospectus and proposed disposal of units in NetLink Trust

General Announcement::Registration of NetLink NBN Trust's prospectus and propose ... Page 1 of 1

General Announcement::Regi stration of Netlink NBN Trust's prospectus and proposed disposal of units in Netlink Trust

Issuer & Securities

Announcement Details

http://infopub.sgx.com/ Apps?A=COW_CorpAnnouncement_ Content&B=Announce ... 10/07/2017

1. INTRODUCTION
2. Registration of Netlink NBN Trust's Prospectus

   Singapore Telecommunications Limited ("Singtel")refers to its announcements dated 9 February 2017, 2 June 2017 and 27 June 2017 and wishes to announce that Netlink NBN Management Pte. Ltd., in its capacity as trustee-manager of Netlink NBN Trust (the "Purchaser"),has today registered its final prospectus (the "Prospectus")in connection with the initial public offering (the "Offering")and listing (the "Listing")of Netlink NBN Trust (the "Trust")on the Singapore Exchange Securities Trading Limited (the "SGX-ST")with the Monetary Authority of Singapore. A copy of the Prospectus is accessible at the SGX-ST's website:http://www.sgx.com

   The Offering of units of Netlink NBN Trust ("Units")will comprise (i) an international placement of 2,713,000,001 Units to investors, including institutional and other investors in Singapore and

   (ii) an offering of 185,000,000 Units to the public in Singapore.

   In addition, the Purchaser has granted the joint bookrunners and joint underwriters to the Offering an over-allotment option (the "Over-Allotment Option")exercisable by Morgan Stanley Asia (Singapore) Pte. (the "Stabilising Manager")(or persons acting on behalf of the Stabilising Manager) in consultation with the joint global coordinators to the Offering, in full or in part, on one occasion, to subscribe for an aggregate of 123,456,000 Units at the price of each Unit offered in the Offering (the "Offering Price")representing not more than 4.3% of the total number of Units in the Offering, solely to cover the over-allotment of Units (if any).

3. Proposed Disposal of Units in Netlink Trust

   In connection with the Offering and the Listing, Singtel has today entered into a unit purchase agreement (the "Unit Purchase Agreement")with the Purchaser, pursuant to which Singtel has agreed to sell and the Purchaser has agreed to purchase 578,780,002 issued and fully paid-up units of Netlink Trust (the "Netlink Units"),which, as at the date of the Unit Purchase Agreement, represent 100% of the issued and paid-up Netlink Units, for an aggregate consideration of approximately 8$1,878 million (the "Consideration"),comprising:

4. a cash consideration of 8$1,095 million1(the "Cash Consideration");and

   The Cash Consideration is based on the proceeds raised by the Trust in the Offering (excluding the Over-Allotment Option), net of other uses of proceeds of the Offering by the Trust, as set out in "Use of Proceeds" section of the Prospectus. The Cash Consideration is subject to certain post-closing adjustments to account for the actual cost and expenses payable in connection with, among others, the Offering and the application for Listing, to be ascertained after Listing.

5. 965,999,998 Units (the "Consideration Units"), constituting approximately 24.99% 2of the total number of Units in issue at the date of admission of the Trust to the Official List of the SGX-ST (the "Listing Date"), to be issued to Singtel Interactive Pte. Ltd. ("Holdco"), a wholly-owned subsidiary of Singtel,

   )

   (the "Proposed Disposal" 3.

   Upon Completion, while Singtel will cease to own the Netlink Units, Singtel will, through Holdco, continue to have an interest in approximately 24.99% of the units of Netlink NBN Trust, which will hold all the Netlink Units.

   In connection with the Proposed Disposal, Netlink Management Pte. Ltd. ("NLMPL") (in its capacity as trustee-manager of Netlink Trust) will also repay in full the outstanding amount due and owing to Singtel of approximately S$1, 100 million under an existing unitholder loan agreement between Singtel (as lender) and NLMPL (in its capacity as the trustee-manager of Netlink Trust) (the "Unitholder Loan"), on the Listing Date.

6. INFORMATION ON NETLINK TRUST AND NETLINK NBN TRUST
7. Netlink Trust. Netlink Trust designs, builds, owns and operates the passive infrastructure (comprising ducts, manholes, fibre cables and central offices) for Singapore's Next Generation Nationwide Broadband Network("NextGen NBN"). The NextGen NBN network is the foundation over which ultra-high-speed internet access is delivered to residential homes and non-residential premises throughout mainland Singapore and its connected islands.

   As at the date of this Announcement, Singtel owns 100% economic interest in Netlink Trust. Under the Info-communications Media Development Authority's ("IMDA") structural separation requirements for the NextGen NBN, Singtel does not have effective control in Netlink Trust.

8. Netlink NBN Trust. The Trust was established primarily for the purpose of owning all of the units of Netlink Trust.

   As at the date of this Announcement, Holdco holds one Unit (representing 100% of the issued Unit) but does not have effective control in the Trust.

9. RATIONALE
10. Rationale. As announced on 9 February 2017, Singtel had commenced preparations for the Offering and Listing pursuant to Singtel's undertaking to the IMDA to divest its stake in Netlink Trust, a 100%-owned associate of Singtel, to less than 25% ownership before 22 April 2018. The Unit Purchase Agreement has been entered into as part of the Offering and Listing. Upon

    Being 25% less one Unit (rounded up to the nearest whole number), assuming the Over-Allotment Option is not exercised. This includes the one Unit issued to Holdco upon establishment of Netlink NBN Trust. In this Announcement, all references to the Singtel Group's (as defined below) 24.99% ownership of Units or the Singtel Group's 24.99% effective interest in Netlink Trust, after the Proposed Disposal, assume that the Over-Allotment Option is not exercised.

    In this Announcement, all references to "Proposed Disposal" shall refer to the disposal of approximately 75.01% of effective interest in Netlink Trust (assuming that the Over-Allotment Option is not exercised).

    Completion, Singtel will cease to own the Netlink Units but will, through Holdco, have an interest in approximately 24.99% of the units of Netlink NBNTrust, which will hold all the Netlink Units.

11. CONSIDERATION

12. The Consideration of approximately 8$1,878 million shall be satisfied as follows:

13. the Cash Consideration of $$1,095 million shall be payable in cash on the Listing Date; and

14. the Consideration Units shall be issued by the Purchaser to Holdco on the Listing Date.

    The Consideration was arrived at based on the Offering Price of 8$0.81 per Unit, determined following a book-building process and taking into account, among others, the demand for the Units under the Offering and the prevailing conditions in the securities market. At completion of the Offering and Listing, Singtel retains approximately 24.99% effective interest in Netlink Trust.

15. PRINCIPAL TERMS OF THE UNIT PURCHASE AGREEMENT

16. Conditions. The completion of the Proposed Disposal ("Completion") is subject to the satisfaction of, inter a/ia, the following conditions precedent:

17. the closing of the Offering; and

18. all necessary licences and approvals for or in respect of the Proposed Disposal having been obtained from the appropriate bodies on terms reasonably acceptable to the parties and such licences and approvals remaining in full force and effect.

19. Completion. Completion of the Proposed Disposal will take place on the morning of the Listing Date or at such other date or time as Singtel and the Purchaser may agree.
20. VALUE OF ASSETS TO BE DISPOSED
21. Valuation.

22. PricewaterhouseCoopers Advisory Services Pte Ltd has, in connection with the Offering and Listing, issued an independent valuation letter ("Independent Valuation Letter") to the Purchaser which provides that:

23. the pro forma enterprise valuation range for 100% of the Units is 8$3,747 million to 8$4,218 million, as at 31 March 2017; and

24. the pro forma equity valuation range for 100% of the Units is 8$3,304 million to 8$3,775 million, after adjusting for external net debt of 8$443 million, as at 31 March 2017.