Singaporean company that specialised in aircraft maintenance, repair and overhaul services, SIA Engineering Company (SIAEC) has acquired the remaining 35 per cent stake in former joint-venture company Heavy Maintenance Singapore Services (HMSS), it announced on Thursday after the market close.
The stake is being acquired from Airbus Services Asia Pacific, a Singapore-incorporated wholly-owned unit of Airbus SAS.
With the transaction completed on Aug 27, HMSS is now a wholly-owned subsidiary of SIAEC, and the relevant joint-venture agreement dated Feb 17, 2016 has been terminated.
The cash consideration of S$1 “was arrived at following arm’s length negotiations, taking into consideration HMSS’ financial position”, said SIAEC. SIAEC has also received S$7.39 million in cash, pursuant to the termination of the joint-venture agreement.
The transaction will be accounted for as an equity transaction, and the latter payment will be recognised directly in equity.
“The acquisition was arrived at following a joint review of the business in view of the Covid-19 pandemic,” said SIAEC. “SIAEC and Airbus will continue to collaborate on projects and review joint opportunities,” it added.
HMSS was incorporated in Singapore in October 2016 to provide airframe maintenance, cabin upgrade and modification services for the Airbus A380 and A350 aircraft in the Asia-Pacific and beyond. It has an issued and fully paid-up share capital of US$27.5 million.
The book value attributable to the sale shares is about S$900,000; the net tangible assets value, about S$100,000, is based on the audited financial statements of HMSS for the financial year ended March 31, 2020.
The transaction is not expected to have a material impact on the net tangible assets per share or the earnings per share of the SIAEC group in the current financial year.
SIAEC shares closed down 1 Singapore cent or 0.53 per cent at S$1.88 on Thursday before the news.