SATS scraps deal for cruise centre
AIRPORT and cruise terminal services operator SATS has pulled out of its agreement to purchase the Singapore Cruise Centre (SCC) from Temasek Holdings.
Under an agreement reached in September last year, SATS was slated to buy the SCC for $110 million, to add to the Marina Bay Cruise Centre which it owns.
In a statement on Monday, SATS said that both parties had agreed to terminate the sale-and-purchase agreement "due to market developments in Asia".
When contacted by The Business Times, SATS was tight-lipped about elaborating on the factors that led to the collapse of the deal. A spokesman said that the company could only confirm that this was due to market developments, without specifying what they were.
Under last September's agreement, SATS' wholly owned subsidiary, SATS Airport Services (SAS), was to directly own 92 per cent of SCC, while SATS-Creuers, another subsidiary, would own 8 per cent. SAS' 60 per cent stake in SATS-Creuers means that SATS would have effectively owned 96.8 per cent of SCC and would, in effect, have paid $106.5 million of the purchase price.
The deal was expected to be completed once it received regulatory approval.
Completion of the deal would have given SATS primary hold of the cruise terminal services market in Singapore. The SATS-Creuers joint venture, a partnership between SAS and Spanish cruise terminal partner Creuers Del Port de Barcelona, was SATS' ticket to the cruise terminal market.
The joint venture cliched a 10-year contract in December 2011 to run the Marina Bay Cruise Centre.
Through the SCC, SATS would have gained control of the international cruise terminal and regional ferry terminal at HarbourFront Centre, as well as the Tanah Merah and Pasir Panjang ferry terminals.
Singapore's competition watchdog, the Competition Commission of Singapore (CCS), told BT that it had been informed (during Phase 2 of its assessment) that the parties involved had decided not to proceed with the merger.
The SATS spokesman said that the issue at hand was not a regulatory one as the "CCS had yet to issue its decision".
Temasek also did not reveal its reasons.
However, a source familiar with the deal said that the termination was purely a business decision based on "market conditions".
The source believes that the deal is not entirely off the table and may take a different form or structure in the future.
"This announcement does not in any way alter SATS' commitment to grow our successful operations at the Marina Bay Cruise Centre and to promote Singapore as a home port, nor our ambition to pursue regional cruise opportunities," Alex Hungate, SATS' president and CEO, said in a statement.