SIAS to raise shareholders' concerns on SMRT deal

THE Securities Investors Association (Singapore) is seeking a meeting with SMRT directors and Temasek Holdings officials to raise concerns among shareholders regarding the privatisation of the rail operator.

"Shareholders have raised their concerns as to why Temasek is pursuing the privatisation deal through a scheme of arrangement rather than a general offer," SIAS founder CEO David Gerald said in a press statement. "Long-term shareholders of SMRT have also asked why no special dividends from the sale of assets of S$991 million under the proposed NRFF (New Rail Financing Framework). Shareholders have also asked SIAS if the price offered is fair."

Temasek had last week announced a S$1.2 billion buyout offer for SMRT at S$1.68 per share. The offer had come after details of the New Rail Financing Framework (NRFF) were unveiled. Under the NRFF, SMRT will sell its rail assets to the Land Transport Authority for S$991 million and operate the train lines for 15 years. SMRT's Ebit (earnings before interest and taxes) margin will also be capped at an average of 5 per cent.