SingPost to divest Australia business at $870m enterprise value
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The sale will generate an expected gain on disposal of $312.1 million, the company said.
PHOTO: ST FILE
Chong Xin Wei
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SINGAPORE - Singapore Post has entered into a share purchase agreement to divest its Australian business at an enterprise value of A$1 billion (S$870 million).
The enterprise value translates into A$775.9 million in cash and generates an expected gain on disposal of about $312.1 million, subject to adjustments determined at the time when the deal is completed.
The buyer is Pacific Equity Partners, an Australia-headquartered private equity fund.
The deal comes after a strategic review of SingPost’s Australia business which explored options to enhance business value and shareholder value, said the group on Dec 2.
SingPost believes that proceeds from the proposed disposal will reinforce the group’s liquidity and strengthen its balance sheet.
It intends to use some of the gross proceeds to repay its borrowings, particularly its Australian dollar-denominated debt amounting to A$362.1 million as at Sept 30, 2024.
SingPost’s total Australian dollar-denominated debt stood at A$614.8 million as at end-September.
Additionally, the group also said it will consider issuing a special dividend, after repaying its debt and considering the future funding needs of SingPost.
The rest of the proceeds will be retained by SingPost for future growth opportunities to invest in existing and/or new businesses, assets and investment opportunities, said the group.
SingPost chairman Simon Israel said: “The board believes this divestment is the best option for shareholders, by crystallising the unrealised value of the business and bringing forward unlocked value for shareholders.”
Assuming that the deal was completed on March 31, 2024, the net tangible asset per SingPost share would stand at 68.9 cents.
Earnings per share would have been 16.2 cents, up from 3.5 cents, if the transaction was completed on April 1, 2023.
The divestment is expected to take place by the end of March 2025.
Following the completion, SingPost Australia Investments and its subsidiaries, including Freight Management Holdings, will no longer be part of the SingPost group.
SingPost will convene an extraordinary general meeting to obtain shareholders’ approval for the transaction.
It will also need to obtain approval from Australia’s Foreign Investment Review Board for the deal to go through.
Shares of SingPost rose 0.9 per cent to 58.5 cents on Dec 2.
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