Singapore Post's subsidiary Quantium Solutions International (QSI) will see its equity shareholding of SingPost's associated company, Shenzhen 4PX Information and Technology Co (4PX), fall to 19.75 per cent from 30.52 per cent after additional new shares are issued.
This comes as 4PX has agreed to issue additional shares to existing shareholder Zhejiang Cainiao Supply Chain Management Co, subject to conditions.
With that, although the number of 4PX shares held by QSI remains unchanged, QSI's equity shareholding percentage in 4PX will be diluted to 19.75 per cent. 4PX will cease to be an associated company of SingPost.
Alibaba Group is the holding company of both Cainiao and Alibaba Investment. Alibaba Investment owns 14.5 per cent of SingPost and 34 per cent of QSI.
In addition to the share subscription, Cainiao has agreed to make further cash contributions to 4PX in two tranches.
In the event that, subsequent to the Cainiao share subscription, either or both of the two tranches of cash contribution does not take place, 4PX shareholders can seek to adjust their equity shareholding accordingly.
As of June 30, the book value of QSI's current 30.52 per cent equity shareholding in 4PX is $38.7 million. A further announcement in relation to the impact on the net tangible assets and earnings per share of SingPost for the financial year ending March 31, 2019, will be made in due course.