SIA Engineering Company (SIAEC) is acquiring a 49 per cent stake in Pos Aviation Engineering Services (PAES) for RM10.1 million (S$3.4 million) from Pos Aviation, SIAEC said on Thursday.

Pos Aviation, which is a wholly-owned subsidiary of Malaysian postal service provider Pos Malaysia Berhad, will retain the remaining 51 per cent stake in PAES.

SIAEC provides aircraft maintenance, repair and overhaul (MRO) services, with a network of line maintenance international stations at 36 airports in eight countries including Singapore. With the addition of PAES's operations in Kuala Lumpur International Airport and nine other stations in Malaysia, its network will expand to 46 airports in nine countries.

"This strategic partnership marks the entry of a Malaysian brand into the global MRO market, an important milestone for Pos Malaysia. We foresee an increase in our customer base and expansion of our market segments through enhanced product offerings, and this will contribute to the future growth of our revenue stream," said Syed Md Najib Syed Md Noor, group chief executive officer of Pos Malaysia.

"SIAEC's expertise in maintenance and fleet management, along with our experience in serving various commercial airlines in Malaysia, allows the strategic partnership to offer a complete MRO solution to customers across the region."

Said Png Kim Chiang, chief executive officer of SIACE: "With the combined strength of both parties' capabilities and experience, we are confident that this strategic partnership will deliver a high level of despatch reliability and quality engineering services to international airline customers in Malaysia."

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The investment in PAES is not expected to have a material impact on SIAEC's earnings per share or net tangible assets per share for the financial year ending March 31, 2020.

SIAEC shares were trading at S$2.57 as at 2pm on Thursday, down one Singapore cent or 0.39 per cent.