SATS secures funding plan for WFS takeover
01 / 12 / 2022
By Damian Brett
Aviation services company SATS has finalised its funding plan for the proposed acquisition of cargo handler Worldwide Flight Services (WFS).
The funding plan for the total acquisition cost of S$1.8bn is a mix of term loan and renounceable underwritten rights issue, with the remaining amount financed by internal cash balance.
The loan is a three-year Euro-denominated term loan equivalent to approximately S$700m.
The rights issue of up to S$800m is expected to be launched in the first quarter of next year, subject to conducive market conditions and the satisfaction or waiver of all of the regulatory approvals and shareholders’ approval of the proposed acquisition.
Finally, cash of S$320m from SATS’ existing cash balance will be used.
SATS said that through the deal it will gain a leading position in strategic hubs connecting key trade lanes across North America and Europe to complement its foothold in Asia Pacific.
“The acquisition will expand SATS’ capabilities to meet growing demand from customers wanting to transport higher-value goods, including pharmaceutical products, vaccines and specialised cargo, on a global scale,” the company said.
Kerry Mok, president and chief executive of SATS, said: “As global competition increases, it is vital for us to tap into higher value business segments and benefit from long-term cargo industry growth trends, even while we work to maintain our leadership position in SATS’ home base in Singapore.
“The acquisition will enhance our business and earnings resilience. The global platform will enable us to service our clients seamlessly across Asia, Europe and the Americas and increase existing offerings. Our balanced funding plan to optimise financing costs and gearing will position SATS for continued sustainable growth.”