Singapore Post plans to sell Freight Management Holdings (FMH), one of its Australia-based units, as part of its broader strategic review.
The sale to Pacific Equity Partners will be at an enterprise value of A$1.02 billion, or some $897.6 million. SingPost will receive actual cash proceeds of A$775.9 million, or $682.8 million, and will recognise a gain on disposal of some $312.1 million.
SingPost plans to use the proceeds to repay Australian dollar-denominated debt of some A$362.1 million as at Sept 30, taken to finance the acquisition of FMH.
As at Sept 30, SingPost's total Australian dollar-denominated debt was some A$614.8 million. In addition, SingPost might pay a special dividend.
“The board believes this divestment is the best option for shareholders by crystallising the unrealised value of the business and bringing forward unlocking value for shareholders,” says SingPost chairman Simon Israel.
SingPost group CEO Vincent Phang says that upon completion of this deal, the company will "review and reset" the strategic plan, with a continued focus on shareholder value. “We will make an announcement about this at the appropriate time,” he adds.
SingPost shares closed at 58 cents on Nov 29.
