STEng – BT
ST Engg unit in JV to set up aircraft facility
ST Aerospace and its partner will invest US$99m in China
SINGAPORE Technologies Engineering (ST Engg) said yesterday its ST Aerospace arm will partner Guangdong Airport Management Corporation (GAMC) to set up a commercial aircraft heavy maintenance facility in Guangzhou, China.
They will invest US$99 million in a joint venture company called ST Aerospace (Guangzhou) Aviation Services, which will be operated and managed by ST Aerospace.
ST Aerospace will own a 49 per cent stake, and GAMC the other 51 per cent.
Located at Guangzhou Baiyun International Airport, the facility will have two hangars – each able to accommodate two widebody aircraft simultaneously. Construction is expected to take about two years, after which the facility will provide maintenance and modification services for Boeing and Airbus aircraft.
ST Engineering said the JV company is expected to start operating two years after incorporation. The venture, which is pending approval by the Chinese government, has already been endorsed by the Civil Aviation Administration of China.
ST Aerospace president Chang Cheow Teck said: ‘Guangzhou is a major aviation hub in Asia. We hope to build a strong capability to provide high-quality and reliable services for our global customers who operate in and fly into China.’
The JV brings the number of ST Aerospace’s China establishments to four. Its three other JVs in China are an aircraft maintenance, repair and overhaul (MRO) company in Shanghai; an engine MRO company in Xiamen and an import-export facility in Guangzhou.
ST Aerospace’s most recent deals include a US$105 million contract with Shanghai-based Spring Airlines in April and a US$750 million engine maintenance contract with India’s Jet Airways at end-March.
ST Engineering said the latest JV is not expected to have a material impact on its consolidated net tangible assets per share and earnings per share this financial year.
ST Engineering’s share price fell two cents yesterday, closing at $3.22.