STEng – BT

ST Engg will acquire assets at distress values

SINGAPORE Technologies Engineering Ltd, Asia’s biggest aircraft maintenance company, will seek acquisitions as a global financial crisis cuts asset prices.

‘During such times, there are opportunities for the group in the midst of the market challenges,’ the company said yesterday in response to Bloomberg queries. ‘We may be able to acquire companies which are now more appealing in terms of valuation.’

ST Engineering said that it will not make use of shareholder approval to buy back shares, preferring to conserve cash for ‘better business opportunities’. Stocks worldwide plunged yesterday, extending the worst global sell-off in 21 years, after US lawmakers rejected a US$700 billion rescue plan for the financial markets, deepening concerns of a widespread recession.

ST Engineering had an order book totalling $9.2 billion as at June 30. The company repairs aircraft and makes military vehicles and navy vessels.

The company added nine cents, or 3.5 per cent, to $2.69 at the close of trading in Singapore. The stock has fallen 28 per cent this year.

ST Engineering has bought assets at distress values before. In 2002, the company purchased the shipbuilding business of US-based Friede Goldman Halter Inc for US$66 million in a bankruptcy auction. — Bloomberg

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