SATS to raise S$798.8m in rights issue for WFS acquisition

Entitled shareholders will be allotted to subscribe for 323 rights shares for every 1,000 existing shares.

SATS is undertaking a renounceable, underwritten rights issue to raise S$798.8m to partially fund its acquisition of Worldwide Flight Services (WFS), the airport service company said in a press release.

Entitled shareholders will be allotted rights to subscribe for 323 rights shares for every 1,000 existing shares held as at the record date at the price of S$2.2 per rights share. This represents a discount of 16% to TERP. The record date for the rights issue will be at 5PM on 2 March.

Venezio Investments, an indirect wholly-owned subsidiary of Temasek, has given an irrevocable undertaking to subscribe for its pro rata 39.68% entitlement to the rights issue. No commission or fee will be paid to Temasek or Venezio in connection with the irrevocable undertaking, SATS said.

The announcement comes after SATS requested to halt trading in the SGX.

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SATS had earlier announced that it had signed a sale and purchase agreement to acquire the air cargo company WFS for S$1.82b. SATS obtained its shareholders’ approval in an extraordinary general meeting held on 18 January 2023.

Apart from net proceeds from the rights issue, SATS will fund the acquisition through an approximately S$700m three-year Euro denominated term loan, and cash from the company’s existing cash balance.

The remaining 60.32% of the rights issue will be underwritten by the banks. DBS is the lead financial adviser; together with BofA and Citi, also serve as the joint financial advisers and underwriters. OCBC and UOB are co-lead managers.