SIAEC sells stake in aircraft fan blade repair joint venture for US$2.8m

SIA Engineering Company (SIAEC) on Wednesday said it has divested its entire 39.2 per cent stake in joint venture (JV) Asian Surface Technologies (AST) for US$2.79 million in cash to its JV partner PAS Technologies.

The mainboard-listed provider of maintenance, repair and overhaul (MRO) services said in a bourse filing that it will recognise an estimated gain of S$2.68 million on the divestment.

AST is a JV between SIAEC, United Technologies International Corporation and PAS, which each hold a 20 per cent and 40.8 per cent stake respectively. The JV's principal activities include repairing aircraft engine fan blades and providing wear-resistant and high-temperature corrosion-resistant coating services to the aviation, oil and gas industries.

SIAEC said the divestment was made in light of declining work volume at AST. It was reviewing its portfolio of JVs for consolidation and to focus on building "next-generation aircraft capabilities".

The group added that it does not expect the transaction to have a material impact on its net tangible assets per share or earnings per share in FY2021/2022.

Shares of SIAEC closed 0.5 per cent or S$0.01 higher at S$2.13 on Tuesday.