SMRT shareholders vote in favour of sale of rail assets to the government

SHAREHOLDERS of transport operator SMRT Corporation have voted on Thursday - after struggling with a frustrating 40-minute delay caused by technical glitches - to sell SMRT rail assets to the Singapore government.

More than 4,000 shareholders are believed to have gathered at Star Theatre to attend an extraordinary general meeting (EGM) on the proposed sale of assets. This was to be followed by the scheme meeting where SMRT shareholders' approval is sought for the S$1.68 a share buyout by Temasek Holdings, which holds a 54 per cent stake in SMRT.

The NRFF proposal received 98.8 per cent of the votes of shareholders represented at the EGM. Those who voted no accounted for the remaining 1.2 per cent. A total of 934.7 million shares voted.

Technical glitches hampered the electronic voting on the transfer of assets, leaving shareholders frustrated and some leaving the premise.

With the nod, SMRT will transfer the ownership of the North-South and East-West Lines, the Circle Line and the Bukit Panjang LRT; the operating assets include the trains, signalling system and maintenance equipment.

Under SMRT Trains' new NRFF licence, SMRT will transfer its rail assets to the government. In return, it will pay an annual licence fee to LTA for the right to operate the lines for 15 years from Oct 1, 2016 with the possibility of a five-year extension -- much shorter than the original 30 to 40 years.

The NRFF will see all future captal-expenditure obligations transfered from SMRT to LTA, resulting in improved free cash flow.

Trading of SMRT shares has been halted. It was last traded at S$1.655 apiece.