Majority of SMRT shareholders vote in favour of rail asset sale, Temasek buyout

Majority of SMRT shareholders vote in favour of rail asset sale, Temasek buyout

Another vote - to accept Temasek's offer to buy back shares at S$1.68 a share - is under way, following reports from shareholders at the venue that voting was delayed due to technical glitches.

SMRT photo

SINGAPORE: A total of 98.84 per cent of public transport operator SMRT's shareholders voted in favour of selling the company's operating assets to the Government on Thursday (Sep 29).

The vote was held at an extraordinary general meeting (EGM) called by SMRT. Held at the Star Theatre, it wasattended by about 4,000 shareholders and representatives.

SMRT's sale of its train licences and operating assets to the Land Transport Authority (LTA) comes as part of the New Rail Financing Framework (NRFF).

TEMASEK BUYOUT APPROVED

Minority SMRT shareholders also voted to accept Temasek's S$1.18 billion offer to buy out the transport operator at S$1.68 a share. A total of 84.8 per cent of the shareholders were in favour of the buyout. These shareholders collectively held 92.9 per cent of the shares of the minority shareholders present. Temasek was not included in this vote.

State investment firm Temasek holds 54.2 per cent of total shares and had earlier indicated that it will accept the NRFF. Meanwhile, 98.8 per cent of shareholders - including majority shareholder, Temasek - voted in favour of the NRFF. The buyout was offered in the form of a scheme of arrangement.

For the buyout to be completed, a simple majority of those in attendance had to be met. Those voting yes should also represent at least 75 per cent of the total value of shares held by those present at the meeting.

Temasek plans to delist SMRT and take it private. The sale of SMRT's train licences and assets will cost the Government S$1.06 billion, although no dividend will be paid out to shareholders.

WHAT THIS MEANS

This will see SMRT selling its operating assets back to LTA. While it is not required to publish annual reports after it delists, the transport operator said it will continue to be "open and transparent" in its dealings in the public transport space.

Mr Desmond Kuek, CEO of SMRT, said: "They have given a positive sign of support for the new rail financing framework asset sale, and this allows us to focus now - being asset light, on delivering quality service and ensuring a high level of quality and services for our train operations. And this is for the benefit of our commuters in the public transport system.

"At the same time, there is positive support for the scheme of arrangement to take SMRT private; (this) also allows us to focus on our core mission of delivering the highest possible level of safe, reliable and commuter-centric services for all our commuters."

SMRT's new owner Temasek said it was a "difficult decision" for many shareholders to cast their votes. But the state investment firm added it will support SMRT's efforts to address teething issues that include concerns over its rail reliability.

"Temasek remains committed to SMRT and its cause," said Mr Chia Song Hwee, president of Temasek International. "There will be challenges ahead, we will continue with our support as SMRT goes through the transition to the new rail financing framework, and also address some of the service, quality and safety reliability concerns that we've experienced recently."

Despite the privatisation, SMRT said there are no immediate plans to make any management or operation changes.

Said SMRT Chairman Koh Yong Guan: "There are many plans in place that are doing well. We will continue to pursue those measures that we have put in place to increase train reliability as well as our business ventures overseas."

PLAGUED BY GLITCH

There was also a hiccup in proceedings, following reports from shareholders at the venue that voting was delayed due to technical glitches.

According to SMRT's Patrick Nathan, the voting service is provided by Boardroom, an independent service provider that specialises in this area. "There was a slight delay," he said.

"As a result of the large number of voters who turned up at the meeting, the glitch lasted for about half an hour as they tried to resolve some of the issues," added Mr Kuek. "We are confident, and our scrutinier has come in to verify that the two votes that were taken are indeed valid, and they will put out their certificate to indeed verify that indeed these two votes are valid."

However, Mr David Gerald, president and CEO of the Securities Investors Association Singapore (SIAS), told Channel NewsAsia that this is "not acceptable".

"A computer glitch of this scale at an EGM of such an important meeting is not acceptable. Many shareholders have complained to SIAS. Whoever is responsible ... needs to be taken to task," he said.

Following the results, the High Court must first sanction the scheme. SMRT expects the process to delist the company to take around three to four weeks.

Before a trading halt was called on SMRT's counter on Thursday, its shares closed at S$1.66 on the Singapore Exchange.

Source: CNA/kk/ek

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