NetLink NBN Trust (also referred to as the “Trust”) is a trust constituted on 19 June 2017 by a declaration of trust by NetLink NBN Management Pte. Ltd., as trustee-manager of NetLink NBN Trust (“Trustee-Manager”), under the trust deed dated 19 June 2017 (as amended and restated by the First Amending and Restating Deed dated 25 July 2018 and the Second Amending and Restating Deed dated 28 September 2020) (collectively, “Trust Deed”). NetLink NBN Trust is registered as a business trust under the Business Trusts Act 2004 (“BTA”), and was listed on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 19 July 2017.
The Trustee-Manager is incorporated in Singapore, and the management of NetLink NBN Trust is undertaken by the Trustee-Manager, the shares of which ("TM Shares") are held on trust for the benefit of the unitholders of NetLink NBN Trust (“Unitholders”) in proportion to such Unitholders’ respective percentage of units held or owned in NetLink NBN Trust (“Units”).
Further, subject to the terms of the trust deed (“TM Shares Trust Deed”) constituting Singapore NBN Trust (“TM Shares Trust”), DBS Trustee Limited (as trustee of Singapore NBN Trust and the legal owner of the TM Shares) will exercise its rights and powers over the Trustee-Manager in such manner as the Unitholders may direct by way of resolutions passed at general meetings. This means that Unitholders are empowered to direct DBS Trustee Limited (among other things, by ordinary resolution at the Annual General Meeting (“AGM”) of the TM Shares Trust) to approve the appointment or re-election of the directors of the Trustee-Manager (“Directors”) (each Director of the Trustee-Manager being required to retire from office at least once every three years). This structure allows the Trustee-Manager to be internalised in contrast with other structures where the trustee-managers are typically owned by sponsors.
An internalised structure pre-empts any conflict of interest between the Unitholders and the Trustee-Manager from arising. The complete alignment of interest between the Trustee-Manager and the Unitholders is a strong factor in the choice of NetLink NBN Management Pte. Ltd. as trustee-manager.
This internalised structure of the Trustee-Manager also benefits NetLink NBN Trust and its subsidiaries (referred to collectively as “NetLink”, and together with the Trustee-Manager referred to as “NetLink NBN Group”) in the following ways:
- The appointment and re-election of Directors of the Trustee-Manager are subject to Unitholders’ approval. With this right provided to Unitholders (which is not available where the trustee-managers are owned by sponsors), Unitholders have a direct role in the election of Directors.
- The fees payable to the Trustee-Manager are primarily used to defray the Trustee-Manager’s expenses (for example, director’s fees payable to the Directors of the Trustee-Manager, as well as certain statutory and administrative costs incurred by the Trustee-Manager). This results in substantially lower fees payable to the Trustee-Manager as compared to other trustee-managers which charges fees on different basis. In addition, there are no acquisition or divestment fees. The lower fee that stems from the internalised structure of the Trustee-Manager results in cost savings for NetLink NBN Trust.
- There is stability and continuity in the management of NetLink NBN Trust. While the BTA and the Trust Deed provide mechanism for the removal of the Trustee-Manager, such removal is unlikely to occur as the interests of the Trustee-Manager and the Unitholders are aligned, and the Directors of the Trustee-Manager are directly elected by the Unitholders.
In addition, pursuant to Infocomm Media Development Authority's (“IMDA”) requirements, the Trust Deed provides that no appointment or removal of the Trustee-Manager shall be effective unless:
- IMDA has approved such appointment or removal; and
- such appointment or removal is not contrary to the control and ownership restrictions under the licence held by the Trustee-Manager to provide facilities-based operations.
The Trust does not have a Sponsor. Further, the Trustee-Manager does not hold any Units in the Trust, and so does not have a blocking stake in the event of a takeover. However, the prior approval of IMDA is required for any amalgamation, reconstruction or change to the trust structure of NetLink.