Temasek and SMRT Jointly Undertake to Privatise SMRT
Temasek and SMRT accept the New Rail Financing Framework (NRFF), as part of a regulatory transition;
However, there remain significant business risks and challenges, which are beyond the control of SMRT;
Despite the risk-sharing mechanism under the NRFF, there is no certainty that SMRT Trains will earn EBIT margins of 5%, compared to the last five fiscal years’ average EBIT margin of 16%;
Privatisation will provide SMRT greater flexibility to focus on its primary role of delivering safe and high quality rail service, without short term pressures of being a listed company;
The proposed privatisation Scheme provides an opportunity for minority shareholders to monetise their holdings for cash at S$1.68 per share;
Temasek agrees with SMRT that there will be no special dividend arising from asset sale under the NRFF - net proceeds received will substantially be used to pay part of its debt of S$762m as at 30 September 2016, and to support re-investment needs of SMRT.