Singtel's A+ rating hinges on NetLink divestment

Singapore

SINGAPORE Telecommunication's divestment of fibre broadband infrastructure operator, NetLink NBN Trust, in the latter's upcoming initial public offering (IPO) is key to maintaining its 'A+' rating, but rating headroom remains low, Fitch Ratings said on Wednesday.

NetLink - which owns and operates the passive infrastructure for Singapore's next-generation national broadband network - expects to raise net proceeds of up to S$2.6 billion from its listing on the mainboard of the Singapore Exchange. The IPO comes ahead of a mandated April 2018 deadline set by the Info-communications Media Development Authority to divest its shareholdings in NetLink to less than 25 per cent. "Our projections assume Singtel will use S$1.5 billion of the proceeds from the divestment of NetLink towards deleveraging in FY18," the credit rating agency said.