SATS to take additional 16.4% stake in Asia Airfreight Terminal Co for HK$339.5m

GROUND handler and caterer SATS S58 on Wednesday (Feb 23) announced that it will acquire an additional 16.4 per cent stake in Asia Airfreight Terminal Company (AAT) for a total sum of HK$339.5 million (S$58.5 million).

AAT is located at Hong Kong International Airport in Chek Lap Kok, New Territories, and offers services such as cargo handling and documentation processing.

SATS said it has entered into a conditional sale and purchase agreement under which it and Eastern Option Limited (EOL) will acquire additional shares of AAT from 3 vendors - Torres Investments, Keppel Telecommunications & Transportation (Keppel T&T) and FedEx.

Following the transactions, SATS and EOL will own stakes of 65.4 per cent and 34.6 per cent of AAT, respectively.

SATS will take Keppel T&T's entire 10 per cent stake in AAT, or 36 million shares, for a cash consideration of HK$207 million, Keppel announced in a filing on Wednesday.

The consideration was arrived at on a willing buyer, willing seller basis after taking into account the financial performance and position of AAT, among other factors, said Keppel. The book value and net tangible asset value of the shares in the 10 per cent stake as at end-December last year was HK$199.4 million.

SATS will also take a 0.4 per cent stake or 1.4 million AAT shares from Torres Investments, and a 6 per cent stake or 21.6 million shares from FedEx.

Meanwhile, EOL will acquire some 52.6 million shares or a 14.6 per cent stake from Torres Investments for a total consideration of HK$302.2 million.

SATS said gateway services, including cargo handling, is one of its existing principal businesses, and Hong Kong is a key gateway for trade routes into the Greater China region.

The group said the Hong Kong International Airport handled more than 4.6 million tonnes of cargo in 2021, which represents 12.9 per cent year-on-year growth.

This acquisition, said SATS, is part of its ordinary course of business and strategy to expand its cargo handling network and accelerate innovation to drive sustainable business growth.

Had the proposed acquisition of shares taken place on Apr 1, 2021, or the start of SATS' fiscal year, the company would have realised an estimated one-off incidental gain of some S$19.8 million.

The company's consolidated earnings per share for the 9 months ended Dec 31 last year would have increased to S$0.036 from S$0.016, and consolidated net asset value per share as at the same time would have risen to S$1.428, from S$1.408.

As at June 1, 2021, Venezio Investments, a wholly-owned subsidiary of Temasek, holds 39.84 per cent of issued shares of SATS. Temasek also holds an additional deemed interest of less than 0.5 per cent in SATS, through its other independently-managed subsidiaries and/or associated companies.

Keppel T&T's divestment is not expected to have any material impact on the net tangible assets per share or earnings per share of Keppel Corporation for the current financial year, said Keppel.

Shares of Keppel ended Wednesday at S$6.02, down 0.2 per cent or S$0.01, while SATS shares closed at S$4.18, down 0.7 per cent or S$0.03.