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7/27/2019 17062013 General Investor Presentation
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STRICTLY CONFIDENTIAL
ASIAN PAY TELEVISION TRUSTMANAGEMENT PRESENTATION
JUNE 2013
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STRICTLY CONFIDENTIAL PAGE
This presentation and the information contained herein (the "Presentation") are for information purposes only and do not constitute or form part of any offer or invitation for sale or the subscription or solicitation of anyoffer or invitation to purchase or subscribe for, or any offer to underwrite or otherwise acquire any units ("Units") representing undivided interests in Asian Pay Television Trust ("APTT" or the "Trust"), nor shall any part ofthe Presentation or the fact of its distribution or communication form the basis of, or be relied on in connection with, any contract, commitment or investment decision whatsoever in relation thereto in Singapore, the United
States, Canada, J apan or any other jurisdiction.
Although care has been taken to ensure that the information in this P resentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change without notice, its accuracy is notguaranteed and it has not been independently verified, and the Presentation may not contain all material information concerning the Trust or its subsidiaries. None of the Trust, the Trustee-Manager, the Underwriters nor
any of their respective members, directors, officers, employees, affiliates, advisers or representatives nor any other person makes any representation or warranty (express or implied) regarding, and assumes anyresponsibility or liability for, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of, or any errors or omissions in, any information or opinions contained herein. None of the Trust, the
Trustee-Manager, the Underwriters or any of their respective members, directors, officers, employees, affiliates, advisers or representatives nor any other person accepts any responsibility or liability (in negligence, orotherwise) whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith. The information set out herein may be subject to updating, completion,
revision, verification and amendment and such information may change materially. In furnishing the Presentation, the Trust, the Trustee-Manager and the Underwriters have not undertaken to provide the recipient(s) with
access to any additional information or updates. The information contained in this Presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated toreflect material developments which may occur after the date of the Presentation.
This Presentation and any materials distributed in connection with this Presentation contains statements that constitute forward-looking statements which involve risks and uncertainties, as they relate to events anddepend on circumstances that may or may not occur in the future. These statements include descriptions regarding the intent, belief or current expectations of the Trustee-Manager or its officers with respect to, among
other things, the consolidated results of operations, financial condition, liquidity, prospects, growth and strategies and future events and plans of the Trust. These statements can be recognized by the use of words such as
expects, plans, will, estimates, projects, or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results of operations, financial condition and liquidity may
differ materially from those made in or suggested by the forward-looking statements contained in this P resentation as a result of various factors and assumptions. You are cautioned not to place undue reliance on theseforward looking statements, which are based on the current view of the Trustee-Manager on future events. No assurance can be given that future events will occur, that projections will be achieved, or that assumptions arecorrect. The Trustee-Manager does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise.
This Presentation is not for distribution, directly or indirectly, in or into the United States, Canada, Japan or any other jurisdiction where it is unlawful to do so. This Presentation is not an offer of securities for sale into theUnited States, Canada, J apan or any other jurisdiction where it is unlawful to do so. The Units have not been and will not be registered under the Securities Act, and may not be offered, sold or delivered within the United
States or to U.S. persons except pursuant to registration under or an applicable exemption from or in a transaction not subject to the registration requirements of the U.S . Securities Act. Accordingly, the Units will only be
offered and sold to non-U.S. persons outside the United States (including to institutional and other investors in Singapore) in reliance on Regulation S under the Securities Act and within the United States to qualifiedinstitutional buyers in reliance on Rule 144A under the Securities Act. No money, securities or other consideration is being solicited, and, if sent in response to this Presentation or the information contained herein, will not
be accepted. There will be no public offering of the Units in the United States.
By reviewing this Presentation, you are deemed to have represented and agreed that you and any persons you represent are either (a) qualified institutional buyers (within the meaning of Regulation 144A under theSecurities Act), or (b) not a U.S. person (as defined in Regulation S under the Securities Act) and are outside of the United States.
IMPORTANT NOTICE AND DISCLAIMER
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INTRODUCTION1
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SNAPSHOT OF APTT
Macquarie APTTTrustee-Manager
Sponsor /Trustee-Manager
Trustee-Manager is a wholly-owned subsidiary of Macquarie Group, which manages global
infrastructure funds with A$97 billion of assets under management
Independent directors comprise majority of the Board of Directors (4 out of 6) Intends to distribute 100% of its Distributable Free Cash Flows
Anchor asset at li st ing was TBC Group, one of the leading, in tegrated cable operators
in Taiwan offering Cable TV and Broadband services
BasicCable TV
Core service of TBC Group with 751K RGUs1
Sole cable TV provider in 5 franchise areas covering ~1.1 million households
Up to 105 TV channels, including all of top 20 channels in Taiwan
PremiumDigital
Cable TV
110K RGUs and 15% Premium Digital Cable TV penetration1
Increasing take-up through promotional STB, in-line with Taiwan government objectives
Up to 73 additional channels, including 19 HD channels, through MPEG4 platform
Broadband
175K RGUs and 23% Broadband penetration1
100% DOCSIS 3.0 enabled HFC network
Offers 120 Mbps Broadband service, fastest residential service in Taiwan1
S$309 million of revenue 6 years of consistent growth
64.0% asset EBITDA margin2 superior profitability, 6 years of consistent margin increase
15.0% capex to revenue ratio network upgrade to 870MHz, expected to drop to 12.5% in 2014
Keyfinancials
(2012)
Source: TBC Group
1. As at 31 Dec 20122. Asset EBITDA margin is a non-IFRS measure. See footnote 1 on page 7
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TBC GROUPHIGHLIGHTS
2
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Sole provider of Cable TV services in highly attractive franchise areas
Growth potential from Broadband, Premium Digi tal Cable TV andChannel Leasing
Superior track record of product innovation and marketing
Resilient business model with efficient cost structure
Substantially invested, advanced HFC network with state-of-the-artdelivery platform
High barriers to entry
TAIWANS LEADING PAY-TV OPERATOR
1
2
4
6
3
5
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TBC Group franchise areas
Source: TBC Group
1. As at 31 Dec 2012
SOLE PROVIDER OF CABLE TV SERVICES INHIGHLY ATTRACTIVE FRANCHISE AREAS
Sole cable TV provider in franchise areas with highlyattractive demographics
~1.1 million households; 68% penetration by TBC Group1
Limited competition from IPTV and DTH operators
TBC Group franchise area highlights
Include major railway and road transport arteries of Taiwan Proximity to Taiwan Taoyuan International Airport and Taipei
Growth of industrial parks and manufacturing facilities
Increasing population due to workforce seeking employment in
TBC Groups franchise areas
1
Number of households
CAGR (2007-2012)
TBC Groupfranchise areas
Taiwanaverage
2012 nominal GDP/capita
(NT$000)
TBC Groupfranchise areas
Taiwanaverage
31% higher
Source: IMF, Taiwans Department of Statistics, Media Partners Asia
Strong macroeconomic fundamentals i n Taiwan
Recovery of real GDP growth from 2013 onwards:
1.3% in 2012 vs. 3.9% in 2013E and 4.5% in 2014E
Young demographic driving pay-TV and broadband consumption:
69% of population is below 50 years old as of 2012
780 597 2.4% 1.6%
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Source: TBC Group. Note: MIIF filings (figures for 2006 to 2009); assumes FX (NTD-S$) of 0.0422 from 2006-2009
1. Asset EBITDA and Asset EBITDA margins are non-IFRS financial measures. Asset EBITDA represents EBITDA plus the LTIP expenses, management fee expenses, off-shore holding company expenses
(which include the Pre-Listing LTIP expenses at Cable TV S.A., salaries for some members of management (for 2010 and 2011 only) pursuant to a reimbursement agreement, audit, legal, accounting andtax fees, and general administration costs), T rust expenses, Trustee-Manager fees and other operating income (loss), less bank charges (including bank service fees for subscription fee collection and bank
handling charges for money remittance or transfers). Asset EBITDA margin is calculated by dividing Asset EBITDA by revenue
RESILIENT BUSINESS MODEL WITH EFFICIENT COSTSTRUCTURE
Basic Cable TV RGUs (000)
Revenue (S$mm)
Consistent growth, competing effectively against alternativepay-TV platforms and withstanding economic downturns
Utility-like, subscription-based business model withsubstantially all payments made in advance
2006 12 Revenue CAGR: 3.4%
2006 12 Basic Cable TV RGU CAGR: 2.0%
2
Continuous asset EBITDA margin expansiondue to scalable and efficient cost structure
Asset EBITDA (S$mm) and Asset EBITDA margin 1
Key operating dri vers supporting cos t efficiency
Majority of popular channels are local inexpensive content
Lack of killer content resulting in strong negotiating position
Headroom in network capacity allowing provision of additionalservices at limited incremental cost
Decline in average churn rate from enhanced customerexperience and strong customer loyalty
Resilient business w ith 6 years of consistent YoYgrowth in Basic Cable TV RGUs and revenue
665689
713 725738 749 751
2006 2007 2008 2009 2010 2011 2012
252.0 259.8 270.4280.5 298.7
304.8 308.7
2006 2007 2008 2009 2010 2011 2012
146.6 155.0164.7 172.1
185.3 194.3197.7
105.3 104.8 105.8 108.4 113.4 110.5 111.0
58.2% 59.7%60.9% 61.4% 62.0%
63.7% 64.0%
2006 2007 2008 2009 2010 2011 2012
Asset EBITDA Total costs Asset EBITDA margin
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29.4%
22.0%19.6%
16.3% 15.8% 15.0% 15.0% 13.0% 12.4% 12.1% 10.8%
Competitor
1
Competitor
2
Competitor
3
Competitor
4
Competitor
5
Competitor
6
Competitor
7
Competitor
8
Competitor
9
Competitor
10
Source: TBC Group, public corporate filings1. Includes certain one-off capital expenditures related to 870MHz network upgrade
2. Peers with mobile operations are adjusted for handset revenue and capitalized SAC
SUBSTANTIALLY INVESTED, ADVANCED HFC NETWORKWITH STATE-OF-THE-ART DELIVERY PLATFORM
Ownership of HFC network and fiber backbone allows TBCGroup to operate independently of third-party networks
Covers substantially all of 1.1 million households in TBCGroup's franchise areas
All three services are offered over one network
Advanced HFC Network
Approximately 98% of network operates at 750 MHz
Completion of upgrade to 870 MHz (from 750 MHz) by
end of 2014 for additional channel capacity and fasterBroadband service
100% DOCSIS 3.0 enabled, fully supporting 120MbpsBroadband services
MPEG4 delivery platform set up as early as 2009
Better video quality
Greater video transmission capacity
More efficient provision of value-added features such asHDTV and DVR services
TBC Group capital expenditureKey highlights
TBC Group has low capex spending2
Aver age capex as % of revenu e in 2010-2012
Aver age (ex-TBC Group): 16.9%
3
33.7 32.9
46.4
11.3% 10.8%
15.0%1
2010 2011 2012
Total Capex (S$m) Capex as a % of Revenue
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Source: Media Partners Asia, AC Nielsen
HIGH BARRIERS TO ENTRY
Top 20 channels in Taiwan (2012)
4
Sanlih Taiwan Channel
Sanlih City Channel
TVBS-News
ETTV News
Formosa TV
Star Chinese Movies
Videoland Drama
Star Chinese Channel
Cti News
ET Movies
Sanlih E-Television News
ET Variety
Taiwan TV
Cti Variety
GTV Entertainment
YOYO TV
ET Western Movies
Videoland Sports
ERA News
GTV Drama
Cable TV will continue to be the dominant TV platform
Superior content portfolio at competitive pricing Affordable services
Adoption of superior technology by operators
Political, structural and technological disadvantages of
IPTV in Taiwan
Pay-TV subscription revenue share by platform
Barriers to entry against new cable entrants
Network roll-out requirements
Long relationships with subscribers; brand awareness
Strong understanding of Taiwan viewers preferences
Application process for a new license
CableTV89%
IPTV11%
DTH
1%
CableTV93%
IPTV
6%
DTH
1%
2012 2017E
Competitor 1Competitor 2
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Source: Media Partners Asia, TBC Group
GROWTH POTENTIAL FROM BROADBAND,PREMIUM DIGITAL CABLE TV AND CHANNEL LEASING
Channel leasing is the largest component of TBC Groups non-subscription Basic Cable TV revenue
Substantial leverage against networks in negotiating fees as the sole cable operator in its franchise areas
TBC Group will likely enjoy stronger than average growth in next few years as rates for home shopping channels become standardised
Non-subscription Basic Cable TV revenue is expected to grow at 2012-14E CAGR of 8.1%
5
Impact on non-subscription Basic Cable TV revenue
2,8203,144
3,4693,750
4,150
2010 2011 2012 2013E 2014E
Taiwan channel l easing market is rapidly growing (NT$mm)
2012 17 Taiwan ch annel leasin g revenue CAGR: 7.5%
Growth in home shopping industry
Increase in number of home shopping networks
Cable TV distribution is expected to remain vital for channelproviders and home shopping companies
Competition for limited number of attractive channel slots
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56
91
110119
132
7.5%
12.1%
14.7%15.7%
17.2%
2010 2011 2012 2013E 2014E
Source: Media Partners Asia, TBC Group
1. As at 31 December 2012
GROWTH POTENTIAL FROM BROADBAND,PREMIUM DIGITAL CABLE TV AND CHANNEL LEASING
5
Premium Dig ital Cable TV RGUs (000) and penetration
2010 14 Premium Dig ital Cable TV RGU CAGR: 24.2%
Cross-selling initiatives
Promotionalset-topboxes
Launched in March 2012
Digital STB penetration at 25.6% comparedto CNS (15.5%) and Kbro (19.4%)1
55% digital STB penetration target by 2014
Premiumdigital
channels
7 free channels, including 2 HD channels
Better video quality across channels
Incentivizes customers to get Premium
Digital TV to access up to 73 additionalchannels, including 19 HD channels
Sales fol lowup /bundling
Attractive bundling promotions
Educates subscribers on usage and benefitsof digital TV
DVR service
Offered as part of bundling package as wellas stand-alone service
Leverages external hard disk drives which ismore cost efficient
Creates stronger customer loyalty
Digital cable TV penetration in Taiwan lower than that of
Korea, Singapore and Hong Kong
Regulatory push by NCC and government proposed 50%
digitisation target by 2015
Consumer preference for better quality video and interactive
services; growing number of HD television sets in Taiwan
In 2009, TBC Group re-launched its Premium Digital Cable TV
service on MPEG4 platform
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Source: TBC Group, NCC1. As of J anuary 2012, when TBCs 12 Mbps services were upgraded to 15 Mbps; Primary Competitor pricing based on NCC data
GROWTH POTENTIAL FROM BROADBAND,PREMIUM DIGITAL CABLE TV AND CHANNEL LEASING
2010 14 Broadband RGU CAGR: 7.2%
Fixed broadband penetration in Taiwan is increasing due to
rapidly growing demand for data
Competitive pricing and bundling with Cable TV
DOCSIS 3.0 enabled network that meets consumer demand
for high-speed internet
Approximately 57% of Broadband RGUs subscribes to 15
Mbps and above1
Introduction of low-speed services
Launch of standalone service
TBC Group o ffers faster speed at competitive pricing 1
TBC Group 5Mbps 8Mbps 15Mbps 25Mbps 60Mbps 120Mbps
PrimaryCompetitor
4Mbps 8Mbps 12Mbps 20Mbps 50Mbps 100Mbps
5
Broadband RGUs (000) and penetration
NT$/month
153165
175188
20220.8%22.0%
23.3%24.8%
26.2%
2010 2011 2012 2013E 2014E
399
699
799 809 859
1,099
799743
899939
999
1,399
0
200
400
600
800
1,000
1,200
1,400
1,600TBC Primary Competitor
SUPERIOR TRACK RECORD FOR PRODUCT
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Source: TBC Group, public corporate filings
1. As at 31 December 2012; 2. TBC Group churn includes deactivations caused by failure to make payments
SUPERIOR TRACK RECORD FOR PRODUCTINNOVATION AND MARKETING
First cable TV operator to offer DVR servicesin Taiwan
First to offer free Promotional STBs in Taiwan
Offers fastest residential broadband service inTaiwan (120 Mbps)1
Innovation
Active up-selling of Premium Digital Cable TVand Broadband services
Enhanced customer loyalty
Bundling
Over 300 sales and customer service staffs1
Two 24-hour call centres providing one-stop-
shop solution for all services
Same day customer service
Information analysis to track customerpreferences
Customerservice
Low monthly Basic Cable TV RGU churn (%)
2012 churn comparison (%)2
Total RGU / Basic Cable TV RGU
Sales channels include inbound sales, directsales, outbound telesales and retail outlets
Maximise subscriber interaction throughCustomer Life Cycle model
Sales
6
2.0% 1.8% 1.8%1.3% 1.3% 1.1%
0.8%
1.28x 1.34x 1.38x
2010 2011 2012
0.76%0.75%
0.76%
2010 2011 2012
Competitor1
Competitor2
Competitor3
Competitor4
Competitor5
Competitor6
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FINANCIAL OVERVIEW4
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SUMMARY OF KEY FINANCIALS
(S$mm) 2010 2011 2012Forecast Year
2013Projection Year
2014
Revenue1
298.7 304.8 308.7 310.8 323.8
Basic Cable TV 246.4 245.6 246.0 245.6 251.2
Premium Digital Cable TV 4.4 8.4 11.6 12.7 16.2
Broadband 47.7 50.6 50.9 52.5 56.4
Total costs 113.4 110.5 111.0 110.4 112.9
Asset EBITDA2 185.3 194.3 197.7 200.4 210.8
% margin2
62.0% 63.7% 64.0% 64.5% 65.1%
Capital expenditure 33.7 32.9 46.4 49.4 40.5
% of revenue 11.3% 10.8% 15.0% 15.9% 12.5%
Notes: Forecast numbers based on the exchange rate as at the Latest Practicable Date of S$1.00:NT$23.90581. Includes other revenue in 2010, 2011 and 2012
2. Asset EBITDA and Asset EBITDA margin are non-IFRS financial measures. S ee footnote 1 on page 7
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Notes: Based on the exchange rate as at the Latest Practicable Date of S$1.00:NT$23.90581. Asset EBITDA is a non-IFRS financial measure. See footnote 1 on page 7
2. EBITDA is a non-IFRS financial measure;
3. Comprises Net offering proceeds, (Repayment) of borrowings to financial institutions / borrowings from financial institutions, and Other financing related costs and fees (non-recurring); represents net proceeds fromfinancial institution borrowings and the offering offset by repayment of Subordinated Debt and extraordinary costs (both of which are paid with offering proceeds) as well as amortization of new senior onshore debt
4. Cash trapped in TBC Group due to excess cash flow calculations (onshore debt covenant) which does not include withholding tax refund and differences arising from timing of withholding tax payment
(S$mm, unless otherwise stated)Forecast Year
2013Projection Year
2014
Asset EBITDA1 200.4 210.8
Less: Off-shore holding company expenses, Trust expenses,
Trustee-Manager fees; add bank charges(5.2) (9.0)
EBITDA2 195.1 201.9
Less: Capital expenditure (49.4) (40.5)
Less: Taxes paid (20.1) (16.6)
Add: Prepaid withholding tax refund 6.1 5.1
Less: Interest paid (47.1) (42.1)
Less: Net borrowings from financial institutions3 27.8 17.4
Less: Distributions to non-controlling interests (0.4) (0.4)
Distribu table free cash flow available for the year 112.1 124.7
Less: Adjustments to distributions attributable to the year4 (7.3) (6.2)
Distributions attributable to the year 104.7 118.5
Add: Excess cash available for distribution at the time of the offering 23.6 -
Total distributions payable to Unitholders 128.3 118.5
APTT DISTRIBUTIONS
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TBC Group debt balances
Note:1. As at 31 December 2012
2. Based on 2012 Asset EBITDA
DEBT STRUCTURE
(S$m)Pre-
Refinancing1Post
Refinancing
Subordinated Debt 165 -
Senior Debt 884 931
Total debt (drawn ) 1,049 931
Total debt (drawn) / Asset EBITDA2 5.3x 4.7x
Revolving credit facility (undrawn) 55 199
Term 7 years
TBC Group has restructured its debt to deleverage and
reduce cost of capital
A part of the IPO offering proceeds were used to repayoffshore USD Subordinated Debt and settle related crosscurrency interest rate swap break costs
The existing onshore senior debt was refinanced
As part of refinancing, TBC Group has secured a new
revolving credit facility of S$199 million to fund growth capital
expenditure and one-off income tax settlement
Leverage post the refinancing is conservative compared to
Taiwan cable operators and in-line with global peers
Interest rate hedging policy to be implemented
(minimum of 50%)
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CONCLUSION
5
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THE ASIAN PAY TELEVISION TRUST STORY
Sole Cable TV service provider in highly attractive franchise areas
Resilient business model with efficient cost structure
Substantially invested, advanced HFC network with state-of-the-art delivery platform
Strong and experienced local management team
World-leading Sponsor with substantial assets and experience in infrastructure investment
Highly experienced Trustee-Manager team
Growth potential from Broadband, Premium Digital Cable TV and channel leasing
Superior track record of product innovation and marketing
High barriers to entry
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APPENDIX6
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STRICTLY CONFIDENTIAL PAGE2
1. TM has the option to elect for Base Fee, Performance Fee, Acquisition Fee and Divestment Fee to be paid in the form of cash and/ or Units out of the Trust Property
2. TM has elected to receive 100% of Base Fee in cash for Forecast Year 2013 and Projection Year 2014, and 100% of Performance Fee in cash for Projection Year 2014
3. Base DPU defined as FY2014 forecast DPU4. CPI Adjusted Base DPU is defined as Base DPU after adjusting upwards for the cumulative percentage increase in the Taiwan CP I following each financial year post Projection Year 2014
5. In the event where Excess DPU is less than zero, such deficit shall be brought forward to subsequent periods to be offset from any Excess DP U before any Performance Fee can be paid
TRUSTEE-MANAGER FEES AND CHARGES
Payable by the Trust to
Trustee-Manager (TM) Amount payable
Base fee1,2 Fixed fee of S$7.0m p.a., subject to % increase in line with Singapore CPI
With an upward adjustment if the Trust makes an acquisition
With a downward adjustment if the Trust makes a divestment
Performance fee1,2
* Forecast Year 2014, Excess DPU =Actual DPU less Base DPU3,5
* Years following Forecast Year 2014, Excess DPU =Actual DPU less CPI Adjusted Base DPU 4,5
Acquisi tion fee Where Sponsor has direct or indirect interests of >50.0% in any investments acquired by the Trust
0.5% (or such lower %) of EV of the investments
All other cases, 1.0% (or such lower %) of the EV of any investments
Divestment fee
0.5% (or such lower %) of the EV of any investments sold by the TrustTermination fee If TM is removed by an Extraordinary Resolution within five years from the Listing Date,
1 years Base Fee based on its effective date of its removal and without any further adjustment
Excess DPU tranche Fee on excess DPU tranche
1. 1st 25% of excess DPU* 3.0%
2. Next 25.0% of excess DPU* 6.0%
3. Subsequent 25% of excess DPU* 12.0%
4. excess DPU* >75% 18.0%
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