SingPost (S08.SI) shares are soaring 3.74% in Thursday's trading session following news of a significant business restructuring. The company's subsidiary, SingPost Logistics Enterprise, has announced plans to become the sole shareholder of Quantum Solutions International (QSI), ending its joint venture with Alibaba Group.
According to a filing with the Singapore Exchange, SingPost Logistics Enterprise has entered into a deed of undertaking with Alibaba Investment Limited (AIL), a subsidiary of Alibaba Group (HKG:9988). The agreement involves a selective capital reduction exercise that will result in the cessation of the joint venture between SingPost and Alibaba Group in QSI. Upon completion of this exercise, QSI will become a wholly-owned subsidiary of SingPost, with the company set to pay a consideration of SG$36.9 million to AIL.
The market's positive reaction suggests that investors view this move favorably, potentially seeing it as a strategic step to strengthen SingPost's position in the logistics sector. By gaining full control of QSI, SingPost may be able to streamline operations and potentially unlock more value from this business unit. The substantial stock price increase reflects optimism about the long-term benefits of this decision and its potential impact on SingPost's future growth and profitability.
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