Shareholders of Singapore Airlines (SIA) shareholders were given 0.73 share in Singapore Airport Terminal Services Limited (SATS) for every one (1) SIA share held by way of dividend in specie at no cost to them. For example, a SIA shareholder will receive 730 SATS shares for every 1,000 SIA shares held.
Though the shareholder does not pay for these SATS shares, the distribution exercise will reduce the Net Tangible Assets (NTA) per share of SIA from $11.31 to $10.68 based on 31 March 2009 financial data. But the shareholder would have gained SATS share at $2.45 per share based on 17 August book closure share price. Continuing with a shareholder having 1,000 SIA shares, his net gain become:
730 SATS share at $2.45 = $1,788.50
Less: loss in NTA of 1,000 SIA = $630
Net Gain = $1,158.50
This distribution will allow Singapore Airlines to concentrate on its airline and aircraft maintenance, repair and overhaul businesses.
SATS on the other hand, which acquired Singapore Food Industries Limited in April 2009, has mid and long term strategy of developing a balanced portfolio comprising a strong Singapore-based food services business and global airport services business. The latter include ground handling, in-flight catering and security services to its airline customers.
Some key ratios of SATS as at 11 September were:
Earnings per share = 14.1 cents
Return on Equity = 10.49%
Dividend per share = 10 cents
Dividend yield = 4.58%
SIA shareholders can buy or sell odd lots (minimum of 1 share) of SATS on the SGX-ST during the one-month window ending 1 October 2009. One can buy 270 SATS shares to top up 730 SATS share already owned to 1,000 SATS shares or off-load odd-lots of SATS shares by selling them. One must bear in mind brokerage fee which has a minimum amount regardless of how small the number of shares traded.
Written on 9/12/2009 3:47 PM
Copyright © 2009, the author known as LKT in Singapore.
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