- POSTED: 29 May 2014 12:23
- UPDATED: 29 May 2014 12:25
Singapore's postal service provider's "strong" business risk profile means it remains unaffected by news of Alibaba Group taking a stake in the company, says Standard & Poor's.
SINGAPORE: International ratings agency Standard & Poor's (S&P) said on Thursday (May 29) that Singapore Post's (SingPost) credit rating is "not affected" by Wednesday's announcement of Alibaba's S$312.5 million investment in the company.
S&P said in a statement the national postal service provider's "strong" business risk profile and "modest" financial risk profile meant it will remain unaffected by the tie-up with the Chinese Internet company. S&P has SingPost at a AAA long-term and A-1+ short term credit rating.
"The partnership is consistent with our expectation that SingPost will continue to enhance its market position in logistics and express delivery in Asia-Pacific and conservatively execute its investment activities," the agency said.
"We expect SingPost to use part of stake-sale proceeds to fund its capital expenditure and acquisitions, including the expansion of its logistics network to accommodate potentially higher e-commerce volumes."
SingPost announced the deal yesterday, stating Alibaba Group will be taking 10.35 per cent stake in the Singapore-listed organisation. It also revealed both parties had signed a Memorandum of Understanding that will allow them to explore the possibility of a joint venture in the area of international e-commerce logistics.
Facebook users on Channel NewsAsia's Page also had their say on the deal when it was announced on Wednesday.
Warren Klass wrote: "Good move, on both sides. Local snail mail is virtually non-existent. Jumping on to the online shopping/shipping bandwagon is the way to go."
Another user, Darren Tay, wrote that he has seen an increase in packing and distribution companies in Singapore due to an increase in online shopping activities, and the deal is likely both companies' way of moving goods bought online faster.