The divestment has generated higher-than-expected gross proceeds of about A$781.5 million, and an estimated gain of S$289.5 million

[SINGAPORE] Shares of Singapore Post (SingPost) : S08 +5.13% surged on Friday (Mar 28) morning, a day after the company announced the completion of the sale of its Australian logistics business.

 

By 11.06 am, the counter had risen 7.7 per cent or S$0.045 to S$0.63, with 22 million securities changing hands, said ShareInvestor data. The last time it traded at such levels was August 2022.

 

It last closed S$0.01 or 1.7 per cent higher at S$0.585 on Thursday.

 

At the midday trading break though, it had fallen to S$0.62, but was still up by S$0.035 or nearly 6 per cent from Thursday&rsquo s close.

 

On Thursday, SingPost said it had completed the divestment of its Australian logistics business, Freight Management Holdings (FMH), for A$1 billion (S$845 million). The business was acquired by Australia-headquartered private equity investment firm Pacific Equity Partners.

 

The divestment generated higher-than-expected gross proceeds of about A$781.5 million, and an estimated gain of S$289.5 million. 

 

In a statement on Thursday, SingPost said the sale necessitates a strategy reset for the group &ndash earnings in the interim are now dependent on its postal and e-commerce logistics business in Singapore, its international e-commerce logistics business, and two major non-core assets that have been performing well.

 

&ldquo The successful divestment of the Australia business, along with potential future divestitures, will create a significant cash pool,&rdquo it added. &ldquo This will allow SingPost to reinvest in its future, reduce debt, or return proceeds to shareholders, with the board ensuring these options align with shareholder interests.&rdquo

The divestment generated A$781.5 million in gross proceeds and an estimated gain of S$289.5 million

 

[SINGAPORE] Singapore Post : S08 +1.74% (SingPost) said on Thursday (Mar 27) that it has completed the divestment of its Australian logistics business, Freight Management Holdings (FMH), for A$1 billion (about S$845 million). The business was acquired by Australia-headquartered private equity investment firm Pacific Equity Partners.

 

The divestment generated gross proceeds of about A$781.5 million &ndash a notch higher than the previously expected A$775.9 million &ndash and an estimated gain of S$289.5 million. This reflects a levered return on equity of around four times SingPost&rsquo s A$93.6 million equity investment in FMH over the last four years, said the group in a bourse filing.

 

Sale proceeds will be used to reduce debt, including the repayment of a A$362.1 million debt. The loan was taken for the financing of FMH&rsquo s acquisition.

 

The board will also announce the amount to be given as a special dividend at a later date.

 

With the completion of the divestment, SingPost&rsquo s wholly owned subsidiary SingPost Australia Investments and all of its subsidiaries, including FMH, will cease to be part of the group.

 

In a press statement, SingPost said the sale necessitates a strategy reset for the group &ndash earnings in the interim are now dependent on its postal and e-commerce logistics business in Singapore, its international e-commerce logistics business, and two major non-core assets that have been performing well.

&ldquo The successful divestment of the Australia business, along with potential future divestitures, will create a significant cash pool,&rdquo it added. &ldquo This will allow SingPost to reinvest in its future, reduce debt, or return proceeds to shareholders, with the board ensuring these options align with shareholder interests.&rdquo