S&P Global Ratings downgraded Singapore Post's (SGX:S08) long-term issuer credit rating to BBB- from BBB among other ratings, while removing them from CreditWatch with negative implications, according to a Friday release.

The rating agency expects the company to scale down after selling its Australian logistics and freight-forwarding businesses, and as its core postal business operations continue to weaken.

However, the company will maintain a net cash position over the next two years due to large deleveraging from the sale proceeds, the rating agency said.

The sale of the Australian businesses has added SG$750 million to the company's cash position, S&P said.

The outlook is stable, as S&P sees the company adopting a frugal investment strategy and navigating the structural erosion in the postal industry.

However, frequent management turnover and several strategy changes put uncertainty on the company's operating and earnings prospects.

S&P believes the company, with its new management, must demonstrate its ability to reclaim its position in the postal and logistics business.

Significant changes in the company's business competitiveness, earnings, or profitability could trigger future rating actions.