SingPost to sell General Storage Company for S$85.1 million

SINGAPORE Post (SingPost) S08 on Thursday announced that it has, through a wholly owned subsidiary, entered into a sale and purchase agreement with Triforce Investments for the sale of the General Storage Company (Lock+Store) for an estimated S$85.1 million.

The General Storage Company is a subsidiary of SingPost that offers private storage facilities. The move comes as part of SingPost's strategy of recycling capital through the divestment of non-core assets, said the company in bourse filing.

The proposed disposal is estimated to result in a gain of about S$6 million after transaction costs. The transaction is expected to take place on Oct 15 should conditions of the agreement be met. Upon the completion of the disposal, the General Storage Company and its subsidiaries will no longer be part of the SingPost Group.

Proceeds from the sale would be channelled towards the group's transformation initiatives and efforts to reposition itself for long term, sustainable growth, according to SingPost.

The consideration was mutually arrived at after arms' length negotiations on a willing-seller and willing-buyer basis after taking into consideration the discounted future cashflows of the business from its portfolio of owned and leased properties with adjustments for levels of debt, cash and working capital.

The General Storage Company was valued at between S$77 million and S$91 million, based on the last valuation by the company as at March 31. The valuation was derived at based on the income approach of different scenarios, and is the sum of estimated annual after-tax free cash flows of the business in the respective scenarios, discounted to their present.

Assuming that the proposed disposal had been completed on March 31, the consolidated net tangible assets per share of SingPost on a pro forma basis would be 62 Singapore cents versus 60.3 cents before the disposal.

Earnings per share on a pro forma basis would have been 1.4 cents after the proposed disposal compared with 1.46 cents before the divestment.

Shares of SingPost ended Thursday flat at 65.5 Singapore cents.