Sats has sold a subsidiary whose main business is to provide ground handling and fuelling services at various US military bases for an enterprise value of US$46 million, or $61.2 million.
Maytag Aircraft, as this unit is called, became part of Sats after the acquisition of Worldwide Flight Services last April.
WFS, in turn, acquired businesses including Maytag earlier on Dec 2021.
The buyer is an entity called Albion River LLC, which describes itself as a "private direct investment firm focused on acquiring companies that produce highly technical defense products and services."
According to Sats, Maytag has a book value of $76 million as at Sept 30 2023 and an NTA of $24.7 million as of the same date and attributable earnings of $2.4 million for Sats' 1HFY2024 ended Sept 2023.
The sale was completed on March 15 and Sats will book net proceeds of US$45.6 million ($60.7 million) and in addition, Maytag is paying a dividend of US$3.2 million to Sats.
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The company will be booking gain on disposal of around $1.6 million.
According to Sats, Maytag operates on a standalone basis and outside of its core businesses and competencies.
Proceeds from the sale will be used to pare down debt and to invest in new growth.
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Sats' CFO Manfred Seah says this divestment is part of the company's efforts to rationalise its portfolio to concentrate on core businesses that have a strategic fit for the group, so that it can focus on high-value segments that will drive sustainable growth.
"We are committed to developing scalable and profitable solutions for our customers that will deliver increased value across the expanded network.
"The group’s financial priorities remain to repay debt, reinvest in the business, and resume dividend distribution to our shareholders," adds Seah.
Sats shares closed at $2.55 on March 15, down 0.39%.
