Strong Demand for New Shares Amid Sats’ Acquisition Plans
Over 90% of Sats’ shareholders have successfully applied for the rights issue, with 90.4% of shares participating in the offering. The company, an inflight caterer and ground handler, announced on Thursday (Mar 23) that it would allocate the 328.1 million rights shares to those whose applications were accepted.
An additional 35 million shares remain, which will be allocated to shareholders who applied for excess rights. With nearly 300 million excess shares requested, preference will be given to rounding up odd lots. Directors and substantial shareholders, who hold significant influence over the company, are ranked last for excess rights allocation.
The rights issue was met with overwhelming demand, oversubscribed at 173%, with a total of 628.1 million applications for 363.1 million shares to be issued. Notably, 144.1 million rights shares were subscribed by Venezio Investments, a subsidiary of Temasek, which holds a 39.68% pro-rata entitlement and invested S$317 million.
As the rights issue has been fully subscribed, the underwritten rights shares will not be required, as per the management and underwriting agreement. The funds raised through this rights issue, priced at S$2.20 per share, will contribute to the acquisition of Worldwide Flight Services (WFS), a Paris-based company, which is expected to cost S$1.8 billion.
The rights issue, alongside a S$700 million euro-denominated loan, will help finance the acquisition, with the remaining costs covered by Sats’ cash reserves. Despite an initial 4% drop in share prices following the announcement in February, Sats’ stock has stabilised, closing at S$2.53 on Thursday, up by 1.6%.
