SingPost to dilute, potentially sell stake in Chinese e-commerce provider
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SingPost’s subsidiary QSI has been granted two put options by Cainiao to dispose of its equity interest in 4PX.
PHOTO: LIANHE ZAOBAO
Yong Hui Ting
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SINGAPORE – Singapore Post will dilute and potentially sell its stake in Chinese e-commerce provider, Shenzhen 4PX Information and Technology (4PX).
The proposed disposal provides an opportunity for SingPost to realise and unlock value in its equity interest in 4PX, it said in a filing on Friday.
The stake in 4PX will be reduced to 17.61 per cent from 19.75 per cent after a loan capitalisation exercise. SingPost’s stake in 4PX is held via subsidiary Quantium Solutions International (QSI).
The dilution arises from a share issuance exercise by 4PX to settle all outstanding amounts of an existing 400 million yuan (S$78 million) loan issued by Alibaba-owned Zhejiang Cainiao Supply Chain Management (Cainiao). The loan capitalisation is subject to and conditional upon certain regulatory approvals being obtained, said SingPost.
Separately, QSI has been granted two put options by Cainiao to dispose of its equity interest in 4PX.
The options are split into a 7.6 per cent and 10 per cent arrangement, in which QSI may exercise the put option to sell its 7.6 per cent interest in 4PX to Cainiao any time after the loan capitalisation exercise for a cash consideration of about 251.3 million yuan.
Cainiao also granted QSI a separate put option to sell the other 10 per cent of QSI’s interests in 4PX to Cainiao for 264 million yuan.
Under the agreement, Cainiao may elect to pay the consideration payable on exercise of the 10 per cent option either in cash or by procuring a transfer of shares held by its related companies in QSI to SingPost, subject to compliance with applicable laws and regulations.
Both put options may be exercised together or individually within six months after the loan capitalisation between 4PX and QSI is completed.
Based on the unaudited consolidated financial statements of SingPost for the six months ended Sept 30, 2022, the book value attributable to QSI’s 19.75 per cent equity interest in 4PX is $85.3 million.
If the put options are both exercised, the disposal exercise will add about $16.6 million to SingPost’s retained earnings.
Assuming the options were exercised on March 31, 2022, the pro forma effect of the disposal would raise net tangible asset per SingPost share to 27.7 cents from 27.2 cents.
There is no change to the earnings per share as the gains from the disposal exercise will be transferred to retained earnings, instead of net profits.
Alibaba, which has a majority interest in Cainiao, also has a 14.5 per cent interest in SingPost and a 34 per cent interest in QSI.
SingPost shares were down one cent, or 1.8 per cent, at 55.5 cents as at 9.27 am on Friday. THE BUSINESS TIMES
