SATs to Acquire Singapore Cruise Center

MarineLink.com
Thursday, September 26, 2013

SATS announced it has through its subsidiaries, SATS Airport Services and SATS-Creuers Cruise Services (SATS-Creuers), entered into a share purchase agreement to acquire the entire issued share capital of Singapore Cruise Center for S$110 million from Temasek.

Singapore Cruise Center is a Singapore-based terminal operator which manages and operates the award-winning international cruise terminal and regional ferry terminal at HarbourFront Center, along with the two ferry terminals at Tanah Merah and Pasir Panjang. It has a strong cash-generative and profitable business, reporting revenue of S$45 million and profit before tax of S$16.7 million for the financial year ended March 31, 2013.

SATS-Creuers is a 60:40 joint venture formed by SATS Airport Services, a wholly-owned subsidiary of SATS, and Creuers del Port de Barcelona (Creuers), to manage and operate the Marina Bay Cruise Center Singapore.

Mr. Tan Chuan Lye, SATS President and Chief Executive Officer said: “This transaction represents a unique opportunity, both for SATS and for Singapore. Singapore Cruise Center has a compelling fit with our existing cruise handling and terminal operations. Together with our strong partnership with Creuers, this transaction will enable us to grow our gateway services business, which in turn will benefit the cruise industry here as a whole.

“The future is bright for the cruise industry in Asia Pacific. The combined entity can leverage our regional airport presence to facilitate and provide a seamless travel experience for Fly-Cruise passengers. This will bolster Singapore’s position as an attractive regional cruise hub and homeport for cruise lines which in turn will benefit the economy.”

Rationale for the Transaction
SATS will connect its operations at Changi Airport with the Singapore Cruise Center in order to enhance the service experience of cruise lines and their passengers. By extending its Cruise-Fly and Fly-Cruise products to Singapore Cruise Center, more passengers will be able to enjoy convenient, seamless transfers to and from Changi Airport. There will also be opportunities for SATS to provide gateway and ship supplies provisioning services to support more cruise lines, hence creating strong homeport opportunities for Singapore.

This deal will grow SATS’ position as a premier gateway services provider more widely, both in Singapore and Asia Pacific. The ferry terminal management business of Singapore Cruise Center will also be a compelling fit with SATS’ gateway capabilities.

As Singapore Cruise Center complements SATS-Creuers’ current cruise terminal operations, the combined entity will have the potential to improve efficiencies, optimize the efficient utilization of berths and resources, and attract more cruise lines to choose Singapore as a regional homeport. The combined entity will also work with industry stakeholders to jointly promote Singapore as a regional cruise hub.

Key Transaction Terms
On completion of the transaction, which is subject to regulatory and shareholders’ approval, SATS Airport Services will directly own approximately 92% of Singapore Cruise Center while SATS-Creuers will own approximately 8%, contributing S$101.25 million and S$8.75 million respectively to the purchase consideration. SATS will effectively own 96.8% of Singapore Cruise Center, contributing S$106.5 million to the purchase consideration.

SATS-Creuers has been granted a call option, exercisable on 31 March 2014, to purchase another 42.3% of Singapore Cruise Center from SATS Airport Services. If the call option is exercised, SATS-Creuers by way of contributing an additional amount of approximately S$46.5 million, will increase its shareholding in Singapore Cruise Center to 50.25%, with SATS Airport Services owning the remaining 49.75%. SATS will then effectively own 79.9% of Singapore Cruise Center, reducing its contribution to the purchase consideration to approximately S$87.9 million.

Purchase Consideration
The purchase consideration of S$110 million was negotiated with Temasek at arm’s length on a willing-buyer, willing-seller basis. It was arrived at based on a number of factors including current market conditions and the business prospects of Singapore Cruise Center. SATS’ portion of the aggregate purchase consideration is intended to be satisfied by internal sources of funds.

The Management of SATS, in consultation with its advisors, considers the purchase consideration to be fair, based on the financial and operational performance of Singapore Cruise Center and the positive growth prospects of the business, when combined with the cruise handling and terminal operations of SATS.

Financial Effects
On a pro forma basis and assuming that the call option is not exercised by SATS-Creuers, the consolidated net tangible assets per share of SATS for FY2012-13 would reduce from S$1.01 to S$0.93. However, the earnings per share of SATS would increase from 16.6 cents to 17.5 cents.

If the call option is exercised by SATS-Creuers, the consolidated net tangible assets per share for FY2012-13 on a pro forma basis would reduce from S$1.01 to S$0.94 while the earnings per share would increase from 16.6 cents to 17.2 cents.

Other than the wider benefits to the cruise business, SATS expects moderate direct operating cost savings and revenue synergies from this transaction.

Regulatory and Shareholders’ Approval
The proposed transaction is subject to, among other things, all necessary regulatory approvals from the Maritime and Port Authority of Singapore and the Competition Commission of Singapore.

Upon receipt of the foregoing approvals, a circular setting out relevant information pertaining to the transaction is expected to be issued to the shareholders of SATS, together with the Notice of Extraordinary General Meeting. Completion of the transaction is subject to SATS shareholders’ approval. Under the listing rules of the SGX-ST, Temasek and its associates will abstain from voting on the resolution to approve the transaction at the Extraordinary General Meeting.

Until the transaction is completed, both SATS-Creuers and Singapore Cruise Center will continue to operate independently.

The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch is the financial advisor to SATS on the proposed transaction of Singapore Cruise Center.
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Young Taken on PESA Advisory Board

Hoover Container Solutions’ chairman and CEO, Donald Young, has been nominated and elected to the Petroleum Equipment & Services Association (PESA) Advisory Board for a three-year term.

US Navy Tests Latest Aegis Weapon System

The U.S. Navy conducted a series of cooperative air defense test exercises with the Spanish navy that culminated in live missile firing events using the latest Aegis Weapon System baseline July 20-21.

Antwerp Port CEO Scoops Baron Title

After 25 years as CEO of Antwerp Port Authority, Eddy Bruyninckx has been raised to the nobility by H.M. the king of Belgium with the rank of baron. In Belgium

Ports

Panama Canal Launches Green Award System

The Panama Canal has launched the Green Connection Award, a new initiative to recognize customers who demonstrate excellent environmental stewardship, and to encourage

Thyssenkrupp Involves in Panama Canal Expansion

Thyssenkrupp supplied 14 innovative elevators for expansion of the Panama Canal , seven for each new lock complex, one of which is on the Atlantic side and the other on the Pacific.

Antwerp Port CEO Scoops Baron Title

After 25 years as CEO of Antwerp Port Authority, Eddy Bruyninckx has been raised to the nobility by H.M. the king of Belgium with the rank of baron. In Belgium

News

Canada Seek to contain Oil Spill

Authorities are building a new containment boom to fight an oil spill in a major western Canadian river, officials said on Saturday, after the spill breached a

Ecuador Pays $112 mln Award to Chevron

Ecuador has paid $112 million to energy company Chevron Corp over a four-decade-old contract dispute, even though it remains in disagreement, the head of the central bank has said.

ASEAN in Discord Ahead of Meeting with top China, U.S. Diplomats

Southeast Asian nations were thrown into disarray after Cambodia on Saturday blocked them from issuing a statement referring to an international court ruling against

Logistics

Global Fleet Growth: A More Mature Trend?

The supply of ships into the fleet is a key determinant of vessel earnings across the shipping sectors, and world fleet growth is closely followed by everyone in the maritime industry,

Cosco: No to Shark Fin

China's biggest shipping and logistics company Cosco has pledged a total ban on transporting shark's fins,  says SCMP. It called the move a "body blow" to the international shark's fin trade.

Seaborne Transportation - Economy Without Borders

With seaborne transportation accounting for the vast majority of the world’s international trade, the importance of the shipping industry to the mechanics of the

Mergers & Acquisitions

G6 Updates Asia-North America West Coast Service

Two services will be merged into one until further notice / Reason is change in market demand / All other services remain unchanged. Members of the G6 Alliance

RINA Closes Edif Group Acquisition

RINA S.p.A, the holding company of the multinational testing, inspection, certification and consulting engineering group based in Genoa, Italy, has announced that

Royal IHC, NETICS Join Forces

Royal IHC has entered into a partnership with NETICS, a civil engineering and consultancy agency. A leading global player in engineering with dredged sediments,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1066 sec (9 req/sec)