Singapore Post said on Monday (Dec 2) it is selling its Australian business, Freight Management Holdings (FMH), to private equity firm Pacific Equity Partners for a cash consideration of A$775.9 million (US$504.1 million).
The sale is expected to generate a gain on disposal of S$312.1 million (US$232.1 million), the company said in a Singapore Exchange filing.
This move follows SingPost’s strategic review initiated in July 2023, and an announcement last week regarding exclusive talks for the potential sale of its Australian business.
SingPost said it will use some of the proceeds to repay borrowings, particularly its Australian dollar-denominated debt of A$362.1 million – undertaken for the financing of the acquisition of FMH – as of Sep 30.
Including borrowings undertaken by FMH, the SingPost Group’s total Australian dollar-denominated debt amounted to A$614.8 million as of Sep 30.
SingPost added that it will retain the remaining proceeds for “future growth opportunities”, including investing in existing or new businesses, assets and investment opportunities.
The board will consider a special dividend payment after taking into account the repayment of the Australian dollar-denominated borrowing and future funding needs, the Alibaba-backed firm said.
In a statement, SingPost chairman Simon Israel said: “The SingPost 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.”
SingPost’s group CEO Vincent Phang added: “Once the transaction is complete, the board and management will review and reset the group’s strategic plan, with a continued focus on shareholder value.”
He said that SingPost will announce more details at “the appropriate time”.
The proposed divestment is expected to be completed at the end of March 2025, subject to regulatory approvals and approval from SingPost’s shareholders.