BELEAGUERED national postal service provider SingPost could offer a potentially “significant” special dividend after it completes its planned sale of two business units, said Maybank on Friday (Jan 3).
The bank was referring to SingPost’s proposed divestment of its Australian logistics business Freight Management Holdings and its potential sale of freight forwarding business Famous Holdings.
Maybank says that the sale of Famous Holdings should conclude by end January 2025, which should raise between S$80 million and S$100 million in proceeds.
“We expect a significant special dividend after both businesses are sold,” said Maybank analyst Jarick Seet.
The analyst said in a note earlier December that SingPost’s cash position will be bumped to S$1.3 billion after the Australian business sale, which is more than its existing S$1.1 billion debt.
“We believe the focus should be on further monetisation with special dividends as the reward,” he said, adding that he believes potential dividends could amount to more than the current share price.
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Maybank maintains its buy rating on SingPost, with a price target of S$0.77. Shares of the troubled company closed up 2.8 per cent or S$0.015 at S$0.555 on Friday.
They have bounced back following the company’s firing of three C-suite executives in late December. They are former group chief executive Vincent Phang, group chief financial officer Vincent Yik, and the chief executive of the company’s international business unit Li Yu.
They were found to have been negligent in the handling of internal investigations over a whistle-blower’s report.
That development had caused the shares to plunge in the days after. Since then, SingPost has been engaged in a tussle of words with the fired executives over the investigations and allegations against them.
Separately, questions have also been raised about whether the divestment of Freight Management Holdings could be scuppered by the sackings.
But it will not be affected, buyer Pacific Equity Partners had told The Business Times.
