ST Engineering, Temasek set up freighter leasing JV amid e-commerce boom

DEFENCE and technology group ST Engineering has set up a joint venture (JV) with Temasek for freighter leasing. This will address the growing demand for freighter aircraft as e-commerce and air cargo volumes expand globally, ST Engineering announced on Wednesday.

Temasek will have a 50 per cent stake in the JV, Juniper Aviation Investments. ST Engineering Aerospace Resources, a unit of the mainboard-listed company, will hold the other half.

Juniper targets to build a portfolio valued at about US$600 million within five years, investing in passenger aircraft to be converted into freighters. ST Engineering will provide maintenance, repair and overhaul service options for these aircraft. It will also be the asset and lease manager to the JV, in line with its aviation asset-management business model.

The JV will set up a subsidiary to hold special-purpose companies for freighter owning and leasing. Its incorporation is not expected to have any material impact on ST Engineering's earnings per share in the current financial year.

Shares of ST Engineering closed at S$4.01 on Wednesday, up 0.5 per cent.