SingPost shareholders vote almost unanimously in favour of selling Australian logistics business
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SingPost expects to receive gross proceeds of approximately A$775.9 million (S$651 million) and a profit of around S$289.5 million from the sale.
ST PHOTO: LIM YAOHUI
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SINGAPORE – Singapore Post (SingPost) shareholders have overwhelmingly backed plans to sell the company’s profitable Australia logistics business, a move likely to yield a special dividend but leave them with stakes in a struggling postal operation.
More than 99 per cent of eligible shareholders voted at an extraordinary general meeting on March 13 to dispose of Freight Management Holdings (FMH), one of Australia’s largest logistics providers, to Australia private equity firm Pacific Equity Partners.
SingPost expects to receive gross proceeds of about A$775.9 million
The move values FMH at A$1.02 billion. SingPost chairman Simon Israel noted last month
Once the deal is completed later in March, SingPost intends to use the proceeds to repay A$362.1 million in borrowings taken to finance FMH’s acquisition. It will then pay a special dividend to shareholders, with the amount to be announced at its annual general meeting, which is usually in July.
However, the FMH sale raises questions about SingPost’s long-term growth potential as it leaves the company with an ailing Singapore postal and logistics business as well as a change in leadership.
SingPost in December 2024 dismissed group chief executive Vincent Phang,
Mr Phang’s position remains unfilled.
The CEO of SingPost’s local operations, Mr Shahrin Abdol Salam, resigned in February 2025
SingPost said in a February update that third-quarter revenue was lower,
The company also retrenched 45 employees
Given those circumstances, SingPost has guided that it will reset its strategy, but in the meantime will carry on with a review of its international logistics business.
It will continue divesting non-core assets to pare debt and free up funds for new investments. Efforts are under way to offload the SingPost Centre in Paya Lebar and the company’s freight forwarding business, Famous Holdings.
Mr Israel told The Straits Times that “the future is one with options. Once we divest Australia, and assuming in the future SingPost Centre and Famous are divested, this will create a meaningful pool of cash that sets up the future for SingPost”.
“There will be the option to reinvest the proceeds to build a new future for the group, the option to pay down debt and the option to return proceeds to shareholders. With these options, the board has to find the right balance in the best interest of the shareholders,” he said.
On March 13, SingPost announced a $30 million investment involving renovations and the installation of new sorting equipment at its Tampines e-commerce logistics facility.
This will enable SingPost to process up to 300,000 small parcels a day compared with 100,000 now. The $182 million, 553.000 sq ft facility can already handle up to 100,000 large parcels a day.
The renovations will also enable the Tampines facility to eventually take on SingPost’s domestic mail sorting operations, which are now being carried out at the SingPost Centre.
Ms Neo noted in the March 13 statement that SingPost is working with the Government on a business model that will ensure the long-term financial sustainability of postal services here.
“On our part, SingPost is focusing on optimising and digitalising our services to enhance cost-effectiveness, fulfilling postal obligations and relevance in a digital environment,” she said.
SingPost shares closed up 2.7 per cent at 56.5 cents on March 13.
