Singapore Post Limited (SingPost) has announced a deal to sell its Australian business, Freight Management Holdings Pty Ltd (FMH), to Pacific Equity Partners (PEP).
The sale values the business at A$1.02 billion. SingPost will receive A$775.9 million in cash.
What does this divestment mean? The company’s Board of Directors believes selling the business is the most beneficial move for shareholders.
By completing the sale, the company can convert the potential value of the business into actual financial returns, allowing shareholders to benefit sooner than if they waited for the value to grow gradually over time.
Essentially, the sale accelerates the process of delivering value to shareholders.
Debt repayment, dividend on SingPost’s radar
SingPost plans to reduce debt and is considering a special dividend following the sale of its Australian business.
Debt repayment focus: SingPost plans to use part of the proceeds to repay A$362.1 million (approximately S$320.8 million) in Australian Dollar-denominated debt related to the acquisition of FMH, as of 30 September 2024.
Total debt reduction: The group’s Australian Dollar-denominated debt, including FMH’s borrowings, stood at A$614.8 million (approximately S$544.9 million) as of the same date.
Special dividend under review: The SingPost Board is considering a special dividend, factoring in debt repayment and future funding needs. Further updates will be shared when a decision is made.
Acquisitions in the market
Late last year, Locate2u reported SingPost wanted to buy Singapore Australia’s Border Express. Then in March this year, Border Express announced it had been acquired by FMH, the SingPost subsidiary.
At the time of this announcement, Simon Slagter, CEO of FMH Group said: “This acquisition will not only expand our network but through collaboration will also strengthen our ability to create end-to-end supply chain efficiency for customers.”
Photo Credit: SingPost (Facebook)
About the author
Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.
