Shareholders making up over 90% of Sats shares made valid applications for rights

SHAREHOLDERS making up 90.4 per cent of Sats : S58 0%shares have made valid applications for new shares it will be issuing, announced the inflight caterer and ground handler in a bourse filing on Thursday (Mar 23).

The issuer will allocate these rights shares, amounting to 328.1 million, in full to those whose applications have been accepted.

The remaining shares of close to 35 million will be allocated to shareholders who applied for excess rights.

Given that the number of applications for excess rights shares, which stands at close to 300 million, exceeds the remaining shares of 35 million, preference would be given to the rounding of odd lots. Directors and substantial shareholders that have control over the company’s daily affairs were ranked last in priority in the allocation of excess rights shares.

Overall, Sats rights issue was oversubscribed at 173 per cent, with a total of 628.1 million applications, including valid and excess applications, for 363.1 million new shares to be issued.

This included 144.1 million rights shares subscribed by Venezio Investments, an indirect subsidiary of Temasek, Sats’ largest shareholder. This represents a pro rata entitlement of 39.68 per cent to the rights issue, which Venezio paid S$317 million for.

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Given that the rights issue has been fully subscribed, none of the underwritten rights shares will be underwritten by the financial advisers and joint underwriters and the co-lead managers, according to the management and underwriting agreement.

The 363.1 million rights issue at S$2.20 apiece was aimed at raising around S$798.8 million via a renounceable underwritten rights issue to partially fund its acquisition of Paris-based Worldwide Flight Services (WFS).

The WFS acquisition is expected to cost the group S$1.8 billion. The transaction will be funded by gross proceeds from the rights issue and a S$700 million three-year euro-denominated term loan, with the remaining to come from Sats’ existing cash balance.

Shares of Sats tumbled by as much as 4 per cent after first announcing the rights issue on Feb 22, given that the rights issue price of S$2.20 represents a 20 per cent discount to its last transacted price of S$2.75 on Feb 20 and a 16 per cent discount to its theoretical ex-rights price of S$2.62 per share.

Sats expects all 363.1 million new shares to be alloted and issued around Mar 29.

Sats shares ended at S$2.53 on Thursday, up 1.6 per cent or S$0.04.