SingPost up 7.7% after divestment of Australian logistics business
[SINGAPORE] Shares of Singapore Post (SingPost) surged on Friday (Mar 28) morning, one day after the company announced the completion of the sale of its Australian logistics business.
At 11.06 am, the counter rose 7.7 per cent or S$0.045 to S$0.63, with 22 million securities changing hands, according to 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.
By the midday trading break, it had fallen to S$0.62, but was still up by S$0.035 or nearly 6 per cent from Thursday’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.
Sale proceeds will be used to reduce debt, including the repayment of a A$362.1 million loan taken for the financing of FMH’s acquisition.
In a press statement on Thursday, SingPost said the sale necessitates a strategy reset for the group – 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.
“The successful divestment of the Australia business, along with potential future divestitures, will create a significant cash pool,” it added. “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.”
