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SIA Engineering announces deals involving its investments in the Philippines
MAINBOARD-LISTED SIA Engineering Company has entered into two agreements with Cebu Air: one was to buy out the latter's interest in SIA Engineering Philippines Corporation (SIAEP), and the other to sell its stake in Aviation Partnership (Philippines) Corp (APP) to the budget airline.
In statements to the bourse operator, the engineering unit of Singapore Airlines (SIA) announced on Monday that it will pay US$7.74 million for Cebu Air's 35 per cent shareholding in SIAEP, making it SIA Engineering's wholly-owned subsidiary.
SIAEP is a Clark-based provider of airframe maintenance, repair, de-lease checks, cabin retrofits and overhaul services for B737, A320 and A330 aircraft as well as line maintenance services.
The selling price was determined after arm's length negotiations on a willing-buyer, willing-seller basis, and took into account the net asset value and financial performance of SIAEP. The stake in question was valued at US$9.32 million based on SIAEP's audited financial statements for the financial year to March.
In its announcement, SIA Engineering said the acquisition is in line with the strategy to strengthen its core competencies and enhance its status as the group's centre of excellence for narrow-body aircraft maintenance, repair and overhaul offerings.
Separately, it will sell its 51 per cent stake in APP at US$5.61 million to Cebu Air, which owns the remaining 49 per cent. Based on the audited financial statements for the financial year to March, 51 per cent of the net asset value of APP was US$4.76 million.
Manila-based APP provides line maintenance services at Manila, Cebu, Davao and Clark, as well as other secondary airports in the Philippines.
The sale of APP is in line with SIA Engineering's overall strategy to streamline and rationalise its line maintenance international operations; and to optimise resources for areas of high growth potential and competitive advantage to ensure the long-term sustainability of its portfolio.
The counter rose one Singapore cent on Monday to S$1.73, before these announcements were made.