Singapore Post may hold an extraordinary general meeting on March 13 to ask for shareholders ‘ authorization for the withdrawal in order to proceed with the purchase of its Australian business.
The company earlier announced on Dec 2, 2024, that it had entered an agreement to sell Freight Management Holdings ( FMH) to , Australia-headquartered Pacific Equity Partners ( PEP ).
SingPost stated in a Singapore Exchange filing on Wednesday ( Feb 26 ) that the proposed sale at an enterprise value of A$ 1.02 billion ( S$ 867 million ) reflects the business’s intrinsic value.
It comes as part of a comprehensive overview of the nation’s postal service that began in July 2023.
SingPost will primarily consist of its Singapore and international business units, which provide telegraph and transportation services in the Asia-Pacific, following the suggested sale.
The committee has stated that the SingPost party will need to change its strategy once the proposed disposal has been completed, given the significantness of the purchase of the American business, according to the company.
The board of directors will consider gradually depriving the team’s non-core assets to lower its debts and establish a fund pool for reinvestment, subject to the group’s strategy update, or return to shareholders.
The team may acquire investing in supporting the expansion of e-commerce logistics in the time to complete the conversion of the Singapore post and logistics business into a responsible one.
SingPost expects to collect about , S$ 659.5 million total money in cash from the sale. This is about , S$ 274.8 million more than the net asset value of the Australia company, according to the business.
The sale is anticipated to result in a gain of about S$ 289.5 million on removal.
According to the business,” The squeezed return on equity is roughly four times the SingPost Group’s$ 93.6 million capital expenditure in FMH over the past four years.”
SingPost intends to use some of the money to repay debts, in particular , A$ 362.1 million in debt undertaken to gain FMH. A unique dividend payment will also be taken into account by the table.
The proposed price” crystallizes the unrealised benefit of the business,” according to board chair Simon Israel in a statement.
According to SingPost, FMH is one of Australia’s leading five shipping companies in terms of profits.
The Australia business contributed S$ 30.4 million to SingPost’s overall operating profit of , S$ 51.2 million for the first quarter of fiscal year 2024/2025 ending in September.
The proposed divestiture continues amid SingPost’s latest sacking of , three older executives , over their admitted handling of a informant’s report related to its worldwide business.
In addition, the organization is planning to employ 45 people as part of a reform practice, despite the statement that the layoffs were” not associated with any previous incidents or reporting reports.”
SingPost’s third-quarter running revenue fell 23.8 per cent year-on-year to achieve S$ 21.1 million, according to economic benefits posted on Feb 20.
The decline was expected to “ongoing economic pressures, including higher prices, supply chain disruptions and a very economical environment”.
In the second quarter, SingPost’s Australia company, growth in revenue of 12.1 percent, and property leasing outweighed lower efforts from its Singapore and international businesses.