Sats shares dip after shareholders approve $1.82 billion WFS acquisition

The acquisition is expected to be completed in March-April 2023. PHOTO: ST FILE

SINGAPORE – Shares of airport service company Sats fell on Thursday after shareholders approved the proposed acquisition of the world’s biggest air cargo handler at an extraordinary general meeting (EGM) the day before.

The shares hit a morning low of $2.91, down three cents or 1 per cent. The counter pared losses to close down one cent, or 0.3 per cent, at $2.93.

While Sats had received an overwhelming vote in favour of a resolution to approve the $1.82 billion acquisition of Worldwide Flight Services, concerns over the amount of debt and share dilution from a rights issue needed to fund the purchase remained.

The deal will be financed by some $700 million in euro-denominated term loans, and an $800 million rights issue of Sats shares. Around $320 million of internal funds will also be deployed.

The acquisition, which was carried out to grow Sats’ profits and improve shareholder value, is expected to be completed in March-April this year. 

The proposed deal garnered 96.8 per cent of the total number of votes at the EGM on Wednesday. In all, there were some 647.6 million shares represented by votes at the meeting, of which 626.9 million were in favour.

Sats needed just a simple majority of 50 per cent voting in favour.

Singapore’s Temasek, which controls 39.68 per cent of Sats via its wholly owned unit Venezio Investments, voted in favour of the deal. Even excluding Temasek, Sats garnered an approval share of 89.7 per cent of the votes present.

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