SBS Transit sells NEL and Seng Kang LRT to LTA. Moves to Rail Financing Framework. Deal does not look Good
By Investment Moats  •  February 15, 2018

So shortly after I shared some of my thoughts on SBS Transit, SBS announces tonight that they will be selling the North East Line and Seng Kang, Punggol LRT to LTA.

SBS will also be transiting to the New Rail Financing Framework. NRFF.

The sale consideration is $28 mil, which is a small amount in the grand scheme of things. With the sale, SBS can be truly asset light.

The NEL concession was a 30 year operating contract with a possible 30 year extension. This will be changed to a 15 year concession starting in April 2018 with the option to extend for 5 more years. This is similar to the SMRT NRFF.

SBS have to pay a licensing charge to LTA for the use of the assets.

SBS’s future income will be based on its operating income or EBIT margin. If the margin is lower than 3.5%, ...

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By Investment Moats
Investment Moats is set up by Kyith Ng and have been around since 2005. He aims to share his experiences making sense of money, how money works and ways to grow his money. It hopes that by sharing his experiences, both good and bad, season investors can advice and critique his decisions and new investors can learn from them and find their own style ...
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