Clifford Chance
Why Singapore business trusts are proving popular with Indian sponsors
5 September 2012
Reliance Communications' proposed initial public offering (IPO) of Global Telecommunications Infrastructure Trust on the Singapore Stock Exchange (the SGX) and the reported upcoming IPO of Religare Healthcare Trust by Fortis Healthcare mark a renewed interest in Singapore business trusts (Business Trusts).
This relative rise in popularity demonstrates that companies in India are reconsidering Business Trusts as potential capital-raising vehicles. Thus far two Business Trusts with assets in India have listed on the SGX: Ascendas India Trust (listed in 2007) and Indiabulls Properties Investment Trust (listed in 2008). In a typical Business Trust structure, a sponsor company (Sponsor) transfers its cash-generating assets into the Business Trust, which pays for the assets using proceeds raised from the IPO of its units.
Singapore is the only jurisdiction in Asia that currently has a regulatory framework for Business Trusts under the Business Trusts Act of 2004.
