SIA Engineering Company Limited (“SIAEC”) wishes to announce that it has entered into an agreement with Pos Aviation Sdn Bhd (“Pos Aviation”), a wholly owned subsidiary of Pos Malaysia Berhad (“Pos Malaysia”), to acquire a 49% stake in Pos Aviation Engineering Services Sdn Bhd (“PAES”).
Under the agreement, Pos Aviation will retain the remaining 51% stake. The indicative consideration for the acquisition of Pos Aviation’s 49% stake is MYR10.087 million in cash. This was arrived at after arm’s length negotiations on a willing-buyer, willing-seller basis, and after considering, inter alia, the net asset value and financial performance of PAES. Based on PAES’s adjusted net assets as at 31 July 2019, the indicative net asset value of the PAES shares acquired by SIA Engineering is MYR10.087 million.
PAES has operations in Kuala Lumpur International Airport and 9 other stations in Malaysia. These stations will complement SIA Engineering’s existing network of Line Maintenance International stations, which will grow to 46 airports in 9 countries including Singapore.
Mr Png Kim Chiang, Chief Executive Officer of SIAEC, said: “We are delighted to establish this partnership with Pos Aviation. 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.”
Syed Md Najib Syed Md Noor, Group Chief Executive Officer of Pos Malaysia Berhad, said: “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. 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.”
“We are undoubtedly excited about the future prospects and very confident that this strategic partnership shall exceed all expectations,” Syed Md Najib added.
The investment in PAES is not expected to have a material impact on the earnings per share or the net tangible assets per share of SIAEC for the financial year ending 31 March 2020. None of the Directors of SIA Engineering has any interest, direct or indirect, in the transaction.