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SingPost shares down 6 pct as it reviews acquisition of TradeGlobal
May 15, 2017 / 2:39 AM / 6 months ago

SingPost shares down 6 pct as it reviews acquisition of TradeGlobal

SINGAPORE, May 15 (Reuters) - Shares in Singapore Post fell as much as 6 percent on Monday to their lowest in more than a year after the firm said it was conducting an in-depth review of an acquisition of a U.S. e-commerce firm for which it took a massive impairment charge.

SingPost reported an 87 percent plunge in net profit for the year ended in March after it took an impairment charge of S$185.0 million for TradeGlobal, which it agreed to buy in 2015 for about S$236 million, it said in a statement late on Friday.

SingPost said TradeGlobal “significantly underperformed the business case which supported the investment”, and that it was “experiencing operational and structural challenges”.

SingPost, which counts China’s e-commerce giant Alibaba Group and Singapore Telecommunications among its top shareholders, said its board had formed an independent committee to conduct a thorough review of the deal.

It has also engaged a legal counsel to assist it on the review and appointed advisory firm FTI Consulting to assess the financial and commercial due diligence involved.

SingPost has previously faced questions over its corporate governance and a probe by the Accounting and Corporate Regulatory Authority (ACRA) into possible breaches of Singapore’s Companies Act. Several high-level executives have also left the company over the last two years.

The company has since put in place measures to address some of the corporate governance concerns, including adopting a directors’ code of business conduct and ethics and policies governing their conflicts of interest.

Shares in Singapore Post fell to as low as S$1.29, the lowest since January 2016. ($1 = 1.4035 Singapore dollars) (Reporting by Aradhana Aravindan; Editing by Miyoung Kim and Miral Fahmy)

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