Berjaya Sports Toto Bhd (BST) today announced plan to spin off its subsidiary, Sports Toto Malaysia (STM), into a business trust to be constituted in Singapore.

The group also intends to list the STM-Trust on the Singapore Bourse, SGX-ST, via an offer for sale and a new issue of units in conjunction with its initial public offer (IPO).

In a statement today, BToto said it would divest STM to the STM-Trust for RM6 billion, to be satisfied by the issuance of 4.43 billion trust units issued at about S$0.50 (RM1.24) each and some RM527.4 million (S$213.4 million) will be settled via the issuance by STM-Trust of a promissory note or bill of exchange in favour of BToto.

STM-Trust will also issue up to 460.0 million new units in conjunction with the IPO and the pricing would be determined via book-building process.

"The monies raised will be utilised to settle the aforesaid RM527.4 million note, to defray expenses of the issue and for working capital," it said.

BToto said it would also make an offer for sale of up to 540.0 million trust units at a price to be determined via the same book building process (OFS).

In all, a total of 1.0 billion STM-Trust units will be made available to institutional, corporate and retail investors in conjunction with the IPO exercise which will represent about 20.46 per cent of the total enlarged outstanding units of 4.89 billion.

On rationale, BToto expected the spin off to unlock further shareholder value in STM, by accessing a potentially larger pool of investors of non-Syariah compliant stocks.

The STM-Trust will be mandated to only invest in gaming type businesses and investments. It would be managed by a Trustee-Manager which will be incorporated in Singapore as a wholly-owned subsidiary of BToto under the proposed name, Sports Toto Malaysia Management Pte Ltd.

Maybank Investment Bank, Malaysia and Maybank Kim Eng Corporate Finance, Singapore have been retained as Adviser to BToto and Issue Manager and Adviser for the IPO, respectively.

Commenting on the scheme, BToto Chief Executive Officer Datuk Robin Tan Yeong Ching said shareholders could also expect to receive special cash dividends from net proceeds to be raised from the OFS.

The scheme would require approvals from both the Malaysian and Singapore regulators, as well as the greenlight from BToto's shareholders for the divestment of STM to the STM-Trust, which is expected to debut on the SGX by year-end.

The group yesterday announced to Bursa Malaysia its suspension from trading with effect from 9 am, today. The counter was last traded at RM4.25. -- Bernama