Singapore Post (SingPost) announced that the sale process of its U.S eCommerce businesses, Jagged Peak and TradeGlobal has now closed with no acceptable offers. SingPost ran a comprehensive sales process over six months since 3 Apr 2019, leading to 8 expressions of interest and finally resulting in 2 non-binding offers. However, these offers were on terms and conditions commercially unfeasible to SingPost.

Following the close of the sale process, the board of directors of Jagged Peak and TradeGlobal have set up board special committees to seek additional liquidity and should that not be possible, they will investigate options such as restructuring including a filing under the U.S federal bankruptcy statue.

Under the supervision of the bankruptcy court, the U.S. subsidiaries intend to pursue the sale of all or substantially all of their assets. SingPost will no longer include the U.S. subsidiaries in its consolidated financial reports.

For the quarter ended 30 June 2019, the unaudited consolidated loss arising from the U.S. subsidiaries was approximately S$6.9m. Prior to this development, we had a HOLD rating and fair value estimate of S$1.00.

Source: OCBC Research - 19 Sept 2019