SATS Strikes Deal With Hong Kong Airlines

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(Photo: Wikipedia / Aero Icarus)

(Photo: Wikipedia / Aero Icarus)

SATS Ltd, the ground services provider headquartered in Singapore, has announced that Hong Kong Airlines is to engage SATS HK Limited and the Asia Airfreight Terminal Company Limited (AAT) to handle its ramp and cargo services respectively.
At the same time, SATS says it has entered into sale and share purchase agreements with Hong Kong Airlines, through the airline’s wholly-owned subsidiaries Voltaire Capital Investment Limited (VCIL) and Holistic Capital Investment Limited (HCIL). These agreements are in relation to the sale of issued shares of SATS’ wholly-owned subsidiary SATS HK and associate AAT. SATS HK provides ramp and passenger handling services at HKIA, while AAT provides cargo handling services.
SATS says it will be divesting a 51% stake in SATS HK to VCIL. SATS HK will capitalise existing loans from SATS to pay for new shares. These shares will be issued to SATS. After which, SATS will sell to VCIL 51% of the enlarged issued share capital of SATS HK at a sale consideration of HKD$76.5 million (approximately S$13.8 million), to be satisfied in cash. With this sale, SATS will hold a 49% shareholding in SATS HK.
SATS will also be selling 4% of the issued shares of AAT to HCIL, at a sale consideration of HKD$100 million (approximately S$18.1 million), to be satisfied in cash. In addition, other shareholders of AAT have also entered into similar sale and share purchase agreements to sell a total of 31% of their shareholding in AAT. Upon completion of the agreements, SATS will remain the largest shareholder with a 45% stake in AAT while HCIL will become the second largest shareholder with 35% shareholding. The third shareholder Eastern Option Limited will continue to hold its existing 20% stake in AAT.
Alex Hungate, President and Chief Executive Officer, SATS, commented: “We welcome this partnership with Hong Kong Airlines. With the injection of their large base load at their Hong Kong hub, SATS HK and AAT will be able to improve the utilisation of their facilities and enjoy better operating leverage. The increased scale will improve service and connectivity for all our customers in Hong Kong. This initiative reflects our agility and ability to adapt and grow in a challenging operating environment.”
SATS added that the completion of the transactions is subject to the fulfilment of certain conditions precedent including the finalisation and execution of the ramp and cargo services agreements with Hong Kong Airlines. SATS stated that the transactions are not expected to have any material impact on its net tangible assets per share and consolidated earnings per share for the current financial year.

This entry was posted in Airline Focus, Airports, Cargo, Contracts, Ground Handling, News, Operations.

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