BJToto.. positive development

BJtoto: It is setting up a trust to house its NFO in Malaysia, in a deal that will deliver a bumper dividend and distribution of free units in the trust. Its proposal is to transfer its entire equity interest in Sports Toto Malaysia Sdn Bhd (STM), which holds the lottery license, to a Singapore based business trust to be known as STM Trust.

The proposal will value BJtoto’s Malaysian NFO business at rm6 billion. The rm6 billion consideration for the transfer will be satisfied chiefly by the issuance of 4.43 billion new units of STM Trust. With the STM units in hand, BJtoto will control about 90.59% in the trust before the IPO in Singapore. The balance consideration of about rm528 million will then be satisfied by way of a promissory note in favor of BJtoto.

After the asset transfer, BJtoto will seek to list up to 4.89 billion units of STM Trust on the Main Board of SGX. This is possibly the first trust that is based on NFO assets to list in Singapore.

BJtoto is expected to pocket rm668 million cash from the sale of 540 million units in the listing exercise, based on an offer price of S$0.50 each. The amount could be bigger should the IPO fetch a higher valuation in Singapore.

Under the proposal, BJtoto said it might also consider distributing all or substantial portion of STM Trust to its existing shareholders. In addition it will propose to distribute the net proceeds from the asset restructuring exercise as a special dividend.