ST Engineering sets up joint venture with Chinese cargo carrier SF Airlines
Uma Devi
SINGAPORE Technologies Engineering (ST Engineering) on Wednesday (May 17) announced that its commercial aerospace business and SF Airlines – a Chinese cargo airline – have incorporated a new joint-venture company in Ezhou, in China’s Hubei province.
The company will operate a greenfield airframe facility at the Ezhou Huahu Airport to provide airframe maintenance, repair and overhaul (MRO) services to cargo and passenger airlines operating in Asia, including SF Airlines.
The first hangar facility is slated to be ready in 2025, ST Engineering said.
The joint-venture company was set up with a registered capital of 100 million yuan (S$19 million). ST Engineering holds a 60 per cent stake in the company, and SF Airlines, the remaining 40 per cent.
Jeffrey Lam, ST Engineering’s president of commercial aerospace, said China will be a “strong growth driver” for Asia’s commercial aerospace sector over the next decade.
“A presence in Hubei, China, will enhance our MRO network in Asia to better meet and capture the rising regional demand, while our strategic collaboration with an airline partner will enable us to start up a greenfield operation quickly,” he added.
The setup of this joint-venture company is not expected to have a material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.
Shares of ST Engineering lost 1.1 per cent or S$0.04 on Wednesday to close at S$3.68 on a cum-dividend basis.
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