SATS Ltd. (SATS) today announced it has finalised its funding plan for the proposed acquisition of Worldwide Flight Services (WFS).
In view of current market conditions, the funding plan for the total acquisition cost of S$1.8 billion has been structured to comprise a balanced mix of term loan and renounceable underwritten rights issue, with the remaining amount financed by internal cash balance.
Details of the Funding Plan are as follows:
- A three-year Euro denominated term loan equivalent to approximately S$700 million from SATS’ principal bankers. The loan has an all-in cost of 4.0% to 4.5% per annum based on prevailing Euribor, and is comparable to the terms of SATS existing borrowing facilities.
- A renounceable underwritten rights issue of up to approximately S$800 million, that is expected to be launched in 1Q 2023, subject to conducive market conditions and the satisfaction or waiver of all of the regulatory approvals in accordance with the sale and purchase agreement dated 28 September 2022, as well as shareholders’ approval of the proposed acquisition at an Extraordinary General Meeting. Temasek, via its indirect wholly-owned subsidiary, Venezio Investments Pte. Ltd. (Venezio), has indicated its intention, subject to the final terms of the rights issue, to subscribe for its pro rata entitlement to the rights issue. In addition, SATS Directors who are also SATS shareholders intend to subscribe for their pro rata entitlements.
- Cash of S$320 million from SATS’ existing cash balance.
Shareholders will be invited to attend an Extraordinary General Meeting to approve the proposed acquisition of WFS and further details with respect to the proposed acquisition will be shared via a shareholder circular.
SATS’ proposed acquisition of WFS will create a pre-eminent global air cargo handling platform. SATS will gain leading positions in strategic hubs connecting key trade lanes across North America and Europe to complement its foothold in Asia Pacific.
Kerry Mok, President and Chief Executive Officer of SATS, said, “As global competition increases, it is vital for us to tap into higher value business segments and benefit from longterm 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.”