Singtel Unit Launches Singapore's Biggest IPO in More Than Six Years -- Update

By P.R. Venkat Features Dow Jones Newswires

Singapore Telecommunications Ltd., will start taking orders from institutional investors for an initial public offering of its high-speed broadband unit that could raise as much as 2.7 billion Singapore dollars (US$1.95 billion), making it the largest such fund raising in more than six years.

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In a prospectus filed to the central bank, Singtel's unit, NetLink NBN Trust, is seeking to sell about 2.9 billion units at a price range of S$0.80 to S$0.93 per unit.

NetLink provides high-speed broadband service to residential and nonresidential customers in Singapore. An IPO of that size, if successful, would be the largest fund-raising in more than six years in the city-state, after Hutchison Port Holdings Trust's US$5.5 billion IPO in 2011.

People familiar with the IPO process said the company is also tapping "anchor investors" who will commit to buy a certain portion of the IPO.

If successful, the IPO will also give a boost to the Singapore equities market, which is facing a drought in such fund-raising. So far this year, the biggest IPO in the country has been recruiting agency HRnet Group Ltd.'s S$174 million offering.

NetLink aims to start trading on the Singapore Exchange on July 19.

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Analysts say fiber-optic penetration in Singapore is likely to increase in the coming years as more residential and commercial consumers seek higher bandwidth for data services such as video streaming. Nomura had estimated that the current residential fiber-optic coverage was around 66% as of December 2015, but is estimated to be around 96% by the end of 2018.

The IPO would also strengthen Singtel's balance sheet and give it more firepower to undertake mergers and acquisitions, especially in the enterprise group. In 2015, the company spent US$810 million to buy Trustwave, a U.S.-based company that specializes in managed security services used for protection of IT infrastructure and response to cyberthreats.

SingTel is Southeast Asia's largest telecommunications company in terms of subscribers. It has a presence in Asia, Australia and Africa, and boasts 595 million mobile customers in 25 countries.

DBS Bank Ltd., Morgan Stanley and UBS AG are among the banks handling the IPO.

Write to P.R. Venkat at venkat.pr@dowjones.com

(END) Dow Jones Newswires

June 27, 2017 05:49 ET (09:49 GMT)