Aircraft maintenance company SIA Engineering on Friday signed an agreement with MB Aerospace for the sale of Taiwan-based Asian Compressor Technology Services (ACTS) that would result in a gain of about S$14.7 million.
ACTS was founded in 1995 as a joint venture by Pratt & Whitney (P&W), China Airlines and Singapore Airlines Engineering to provide in-house repair of aero-engine components within the turbine and compressor sections of gas turbine aero-engines.
As per the deal, SIA Engineering, along with the other two partners P&W and China Airlines will sell their respective stakes for US$60 million in cash, out of which SIA's share will be US$14.7 million, the company said in a regulatory filing.
"Expanding our capabilities in the turbine and compressor sections of the aero-engine is a key strategic objective for MB Aerospace and we have ambitious plans for further growth and investment in both Taiwan and Newton Abbot," said Craig Gallagher, MB Aerospace Chief Executive Officer.
Based on ACTS' audited financial statements for the financial year ended 31 December 2016, the net tangible asset value of SIA's stake in ACTS is US$8.6 million.
The sale of SIA's 24.5 percent stake in ACTS is expected to result in a gain of about S$14.3 million for SIA for the financial year ending March 31, 2018.
Shares in SIA Engineering ended up 1.2 percent to S$3.27 on the Singapore Exchange on Friday. The stock has lost 2 percent so far this year.
