SMRT to transfer ownership of train assets to LTA

SMRT Corp will transfer the ownership of its rail assets, including trains and signalling systems, to the Land Transport Authority (LTA) for S$991 million.

This is subject to shareholders' approval.

"The transition will benefit commuters,'' LTA said.

On Friday, SMRT opened at S$1.550. The shares were trading around S$1.545 each, up half a cent, or 0.32 per cent, when the train and taxi operator shocked the market with a request for an "immediate halt" in the trading of its shares around noon. More than three million shares changed hands.

"The most likely reason is the development of the Rail Financing Framework, which has been much talked about,'' a broker had speculated, referring to new business model for Singapore's public bus industry which will be introduced in stages. One of the key differences between the old and new model is that under the new model, the government will assume ownership of all bus services-related infrastructure and assets.

An analyst had earlier told The Business Times that the new model would have a positive impact on SMRT's share price.