Singapore Post - OCBC Investment 2024-12-02: Proposed Divestment Of Australia Business

• SingPost's Australia business to be sold to Pacific Equity Partners (PEP) for an enterprise value of AUD1.02b; with expected gain on disposal of S$312.1m.
• Proceeds to be deployed towards paying down AUD-denominated debt and potentially a special dividend.

Completion of strategic review of Australia business

• - Read this at SGinvestors.io -
• - Read this at SGinvestors.io -

Part of the proceeds to be deployed towards paring down debt.

• SingPost intends to use some of the divestment proceeds to repay borrowings, in particular AUD362.1m (S$320.8m) worth of debt undertaken to finance the acquisition of FMH. The total AUD-denominated debt on SingPost’s books as at 30 Sep 2024 was AUD614.8m (S$544.9m).
• Meaningful deleveraging will enhance the group’s financial position and flexibility, and bring about financial cost savings. We note that SingPost’s 1HFY25 (financial year ending 31 Mar 2025) net profit had earlier missed our expectations on finance expenses, which surged 69.1% y-o-y.
• SingPost is also considering the payment of a special dividend to shareholders, after taking into account future funding needs; more details on this will be announced in due course.

Divestment is expected to be completed by Mar 2025, subject to certain approvals.

• Read more at SGinvestors.io.

Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2024-12-02 SGinvestors.io

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