SIA Engineering to take 75% stake in SR Technics Malaysia for US$3.75m

SIA ENGINEERING S59 : S59 0% has entered into an agreement with maintenance, repair and overhaul (MRO) service provider SR Technics Switzerland to acquire a 75 per cent stake in SR Technics Malaysia for US$3.75 million to form an MRO joint venture (JV).

In a Wednesday (Feb 16) announcement, SIA Engineering said the JV will complement its own existing component repair and overhaul services, and fleet management programmes.

The US$3.75 million price tag of the stake that SIA Engineering will acquire will be paid in cash. SR Technics will retain the remaining 25 per cent stake.

Based on SRT Malaysia's adjusted net tangible assets as at Nov 30, 2021, the net asset value of the 75 per cent stake stands at US$2.62 million.

Ng Chin Hwee, chief executive of SIA Engineering, said: "The setting up of this component repair and overhaul JV with SR Technics in Malaysia is a significant step in our strategic plan to grow our component repair and overhaul services network under our recently announced component services division.

"The JV will complement SIA Engineering's existing portfolio of engine and component JVs with leading original equipment manufacturers (OEM), and will be an additional platform that will broaden the scope of component repair and overhaul services that SIA Engineering offers to its airline customers and OEM partners."

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Jean-Marc Lenz, chief executive of SR Technics, said that with the JV between SIA Engineering and SR Technics Malaysia, both partners will benefit from "new synergies" created.

"Partnering with SIA Engineering will not only enable us further to increase the business volume on existing repair capabilities, but it will also allow us to jointly develop new repair capabilities for new engine types and aircraft platforms," he added.

The transaction is not expected to have a material impact on SIA Engineering's net tangible assets per share or earnings per share for the fiscal year ending Mar 31.

Shares of SIA Engineering ended Wednesday at S$2.26, up 0.4 per cent or S$0.01.