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ST Engineering divests 5% stake in ST Aerospace Guangzhou for US$7m
SINGAPORE Technologies Engineering (ST Engineering) announced after trading hours on Thursday that it is divesting its 5 per cent stake in ST Aerospace (Guangzhou) Aviation Services Company, a joint venture with Guangdong Airport Authority, to Japan Airlines for a consideration of US$7 million.
The consideration was arrived at taking into account STA Guangzhou's current performance, net asset value and growth potential in Guangzhou's Baiyun International Airport, according to a filing by ST Engineering.
Upon completion of the deal - which is subject to customary closing conditions - ST Aerospace and Guangdong Airport Authority will each own 44 per cent and 51 per cent stake respectively in STA Guangzhou, while Japan Airlines will become a strategic partner of the joint venture with a 5 per cent stake.
STA Guangzhou, set up in 2014, is an aircraft maintenance, repair and overhaul (MRO) station located within Guangzhou Baiyun International Airport in China.
"Given Japan Airlines' strong reputation in quality and standards for both its services and demands placed on MRO providers, the new partnership will facilitate cross-learning and enable STA Guangzhou to enhance its own standing in safety and quality, and be better positioned for greater growth," said ST Engineering in a statement.
The divestment is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.